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Kenyans embrace mobile money transfers

22 April 2013, 13:48

Nairobi - Buoyed by innovation and a thriving economy, Kenya continues entrenching itself as a powerhouse in mobile money transfers.

With more than 30 million mobile subscribers, Kenya is on the threshold of an economic boom supported by a burgeoning telecommunications sector that has raised the East African country’s global profile.

More than 80 per cent of Kenyans who own mobile phones now engage in financial transactions using mobile services pioneered by telecommunications giant Safaricom and embraced by rivals Barti Airtel, Orange Telkom and YuMobile.

According to the World Bank, more than half of the world’s mobile money transactions take place in Kenya where annual transfers now hover around US$10 billon, with innumerable benefits to the users as well as a significant impact on the service providers’ profits.

Safaricom’s popular mobile banking brands M-Pesa and M-Shwari compete fiercely with Airtel Money, YouCash and Orange Money.

Kenyans have embraced the services in masses due to the security, reliability, affordability and convenience associated with mobile banking and cash transfer.

M-Pesa, the most popular cash transfer service in Kenya, allows subscribers to transfer from KES 50 to large amounts such as KES 70, 000.

This is good news for a country where most citizens, especially in the rural localities, remain largely unbanked due to low literacy levels and poverty.

According to Safaricom, its cash transfer service M-Pesa is its biggest success story.

Over 14 million - the number of M-Pesa subscribers

Chief executive Bob Collymore says the service has more than 14 million subscribers who are served by more than 40,000 agents spread across the country.

“Really, the whole idea is about having a constructive edge, not just a competitive edge,” Collymore says of M-Pesa, adding that as a brand largely trusted by Safaricom subscribers, the money transfer service allows subscribers not only to send and receive money but also to pay utility bills such as electricity, power and telephone bills.

The services have impacted radically on Kenyans’ lives because they can now avoid long bank queues.

At the same time, it is a security boost as customers no longer need to carry huge amounts of cash.

City workers say mobile money transfer are cheaper and a convenient method of sending money to their families in rural areas.

“I no longer travel for two days from the coastal city of Mombasa to go to my village in Migori at the Kenya-Tanzania border to take money to my family.

"I send them on M-Pesa, which is convenient and affordable,” says Joseph Otieno, a casual worker.

Experts say the mobile money services have now predisposed Kenya to a better macroeconomic environment, where the country’s Central Bank can better monitor cash in circulation.

Airtel Money has also become popular for paying utility bills with corporate including the Nairobi Water and Sewerage Company, Kenya Power, DStv and the City Council of Nairobi enlisting its services for payment of bills due to its convenience.

“I have a DStv account. Long ago they used to disconnect my subscription because I sometimes failed to get time to go and renew the service.

"Since the advent of M-Pesa, I pay for my account in time and there does not suffer and disruptions,” Paul Misumba told CAJ News in Nairobi.

Eight-year old Priscila Obuya has not been left out.

She has an M-Pesa account and uses it to keep her savings. She also uses Safaricom’s M-Shwari to borrow money and pay it back.

“I do this myself, I don’t need anyone’s help to transact on my cell phone,” she says.

Mobile money the way to go

Airtel believes mobile money is the way to go.

The mobile service provider says besides voice and data, cash transfer is the latest powerful frontier for the communications industry.

“We have been educating customers on the benefits of Airtel Money. Our long term goal is to continue providing locally relevant and simple to use M-commerce solutions,” says Airtel Kenya Managing Director Shivan Bhargava.

Airtel believes mobile cash transfer has huge implications for the developing world, where demand for innovation continues rising amid economic upheavals.

Bhargava says Airtel Money will continue exploring ways of improving the service to meet changing technological and customers’ demands.

Mobile subscribers risen to 30.7 million

Mobile telephony in Kenya has been significantly rising, with latest findings by industry regulator, the Communications Commission of Kenya, showing that the total number of mobile subscribers have risen to 30.7 million in the last quarter.

Nearly 90 per cent of the population has access to a cell phone, with pre-paid subscribers continuing to dominate the mobile sub-sector, contributing 99 per cent of the total number of subscribers.

Mobile penetration on the other hand increased to 78 per cent during the same period up from 77.2 per cent recorded during the first quarter of last year.

Mobile banking a powerful tool for economic growth

Kenya’s Information and Communications permanent secretary Bitange Ndemo believes mobile banking is a powerful tool for economic growth and should be protected from fraudsters.

“The idea of mobile money was meant to solve customers’ problems relating to money transfer but it ended up spreading like a bushfire,” he says, adding commercial banks were now partnering with the mobile service providers to avoid losing business.

“There are so many teething challenges facing consumers in Kenya and the rest of Africa. This provides the need for innovation to provide solutions,” Ndemo says.

- CAJ News


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