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Kenyans mobile money use tops 10 bln USD

30 August 2013, 12:46

Nairobi - Kenya's mobile money transactions topped 10 billion U.S. dollars in the first half of this year, according to official figures.

The Central Bank of Kenya (CBK) statistics show that value of transactions stood at 10.02 billion dollars, surpassing the similar period in 2012 by close to 2 billion dollars.

In the first six months of last year, Kenyans made transactions worth 8.35 billion dollars, which is 1.67 billion dollars lower than what was recorded this year.

The rise in value of mobile money transactions in the Kenya is a clear sign of how the platform is deeply entrenched in the lives of Kenyans as number of subscribers also surge.

The bulk of transactions in the first half of this year were made in second quarter, particularly in May and June, where business surpassed 1.7 billion dollars.

In May, Kenyans transacted business worth 1.82 billion dollars, the highest in the history of the technology started in 2003 in East Africa's biggest economy.

In June, mobile money transactions stood at 1.75 billion dollars and in April, they were 1.63 billion dollars.

In the first quarter, the bulk of the transactions were made in January, where business stood at 1.64 billion dollars, before falling to 1.62 billion dollars in February and 1.55 billion dollars in March, according to CBK.

New tariffs by Safaricom

The upward growth of mobile money use indicates that rise in tariffs effected by Safaricom, which controls over 90 percent of the market, has not affected use of the platform.

Safaricom in February raised charges of Mpesa, the biggest mobile cash transfer service in Kenya with over 17 million subscribers. The company increased charges by 10 percent after government introduced excise duty of similar margin.

Mobile money users are now paying 0.69 dollars, up from 0.63 dollars to send and receive between 5 dollars and 11 dollars on M- Pesa. Sending charges are 0.37 dollars, up from 0.34 dollars and receiving fee is 0.31 dollars, up from 0.26 dollars.

Analysts feared the high fees will affect mobile money use as majority of subscribers complained about the new tariffs, which only Safaricom effected.

The others namely Airtel, Yu and Orange, which control a smaller share of market, maintained their charges.

"The popularity of the service, coupled with its ease and convenience in use as well as facilitation of electronic payments have continued to be the main drivers behind growth of mobile money," noted Communication Commission of Kenya (CCK) in its quarterly report released last month.

During the period in review, the number of mobile money subscribers increased to 23.8 million, up from 22.3 million in March.

In January, mobile money subscribers stood at 21.4 million. Kenya closed 2012 with 21.1 million mobile money services subscribers, according to CBK.

The rise in subscribers has seen East African nation residents carry out an average of 56 million transactions per month.

The bulk of transactions during the period in review were recorded in May and June at 60.4 million and 60 million respectively. On the other hand, the least transactions were recorded in March at 52.4 million.

The number of mobile money agents has also been on the rise as demand for service increases.

As at end of June, there were 103,165 mobile money agents in the East African nation, up from 85,548 at the beginning of the year.

The number, according to CBK data, has been growing by at least 3,000 agents each month, with the biggest rise being noted between February and March, where it rose by 5,000.

"The rise in number agents indicates increased accessibility of mobile money transfer services as well as creation of employment opportunities in the sector," noted CCK in the report.

The use of mobile money is expected to surge further in the Kenya, as service providers come up with innovative products to drive growth.

Safaricom recently introduced Lipa na M-PESA service, which allows customers to pay for goods and services using mobile money.

Through the platform, Kenyans can pay salaries, utility bills, dividends and fare, in the case of transport operators. The company a fortnight ago introduced another service, Lipa Kodi, which allows tenants to pay rent through M-pesa.

The services are expected to drive growth and use of mobile money in the East African nation. On the other hand, other service providers, including Airtel, have stepped up efforts to recruit more agents to deepen growth of their services.

Airtel partnered with Equity Bank to enable subscribers transact business through the bank's agency outlets.

The rise in mobile money usage this year will certainly see value of transactions surpass last year's, which stood at 18 billion dollars. 


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