Mobile Money Deals Growth at 2-year Low

The average growth in mobile money volumes in the first six months of the year has averaged 28 percent since 2010. FILE PHOTO | NMG

August 6, 2020//-Mobile money payments are on course for their slowest annual growth since the inception of M-Pesa 13 years ago, having edged higher by just 0.42 percent in the first six months of the year compared to the similar period in 2019.

Latest data published by the Central Bank of Kenya (CBK) shows that Kenyans moved a total of Sh2.144 trillion through their mobile phones in the six months to June 2020, compared to Sh2.135 trillion in similar period last year.

The average growth in mobile money volumes in the first six months of the year has averaged 28 percent since 2010.

The slow growth has come as Kenyans grapple with depressed earnings due to adverse effects of restrictions imposed to curb the spread of the coronavirus.

Although cash remains the most commonly used mode of payment in the country, the use of mobile money has picked up in recent years, especially in payment for goods and services, hence the slow growth is an indicator of the economic hardships that Kenyans are enduring this year.

In April, when the country first imposed restrictions to fight the spread of Covid-19, the volume transacted through mobile phones fell by Sh56.5 billion month-on-month to a 26-month low of Sh308 billion, indicating the huge effect of the pandemic on the local economy.

In the six-month period, the number of transactions fell by 65.4 million to 853.5 million—a 7.1 percent drop— indicating that Kenyans had reduced their money sending activities despite the preference for the mode of payment as people actively avoided issuing physical cash in fear of spreading the Covid-19 virus.

Mobile money platforms were, in the formative years, used primary for person-to-person cash transfers but are now used for payment of services and goods, a shift that has led to the growth in amount of money moved through the wallets.

Thus, the slowdown of business in the country has affected the bulk transfers side of the transfers, leading to the reduced year-on-year growth.

The CBK data also shows that while the value of transactions slowed down and the number of contracted in the first half, accounts rose by 32 percent to 61.726 million in June 2020 from 46.8 million in June 2019.

The number of registered mobile money agents also went up in the period, by seven percent to 237,637.

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