Kenya's mobile money use hits $2.6 million per hour
30 January 2014, 19:23
Nairobi - Kenya's unparalleled use of mobile money grew to historic level in 2013 as the East African nation transacted 22.4 billion U.S. dollars.
This translates to 61 million dollars a day or 2.6 million dollars an hour, new data revealed Thursday. The transactions were an increase of 4.4 billion dollars from last year's, which stood at 18 billion dollars.
The Central Bank of Kenya figures indicated how Kenya has cemented its position globally in the use of mobile money.
The cash transacted during the period surpassed East African nation's 2013/2014 budget, which stands at 18.8 billion dollars, by 3.6 billion dollars.
The bulk of the mobile money transactions were made in the third quarter of 2013, particularly in December, where Kenyans used the platform to send and receive money from their loved ones during Christmas holiday.
In the period October to December, Kenyans transacted over 6.2 billion dollars on their mobile phones.
In October and November last year, the value of the transactions stood at an average of 2 billion dollars before surging to 2.2 billion dollars in December.
Mobile money agents during the holiday recorded booming business as people mainly used their phones to send and withdraw money.
"A good number of people were sending over 580 dollars, but the bulk was sending an average of 24 dollars. The minimum many people deposited was 12 dollars," said Fredrick Mula, a mobile money agent in Nairobi noted in an earlier interview.
The businessman in the week Christmas Day fell was transacting business worth over 1,400 dollars each day.
In a study on social and economic mobile money networks in Kenya, researchers from University of Illinois in the US found out that Kenyans use the service to create and enhance relationships by sending money and airtime gifts.
"Many Kenyans see their phones as a means through which money can be scattered, often using the word 'sambaza' (spread), which is the name of Safaricom's airtime transfer service, but also conveys the ease through which money on one's phone can be frittered away in response to the small requests of friends and family," noted Sibel Kusimba in the study with his two colleagues conducted in western Kenya in June last year.
Kusimba observed that what makes mobile money appealing is that the service is convenient and security is high.
Kenyans mainly use mobile money to transfer and receive cash, pay for bills, rent, school fees and save and borrow money.
East African nation's use of mobile cash transfer services have been on the rise since the service was launched in the country in 2007, an indication of how the technology has become an integral part of a majority of Kenyans.
In 2011, Kenya made mobile money transactions worth 13.4 billion dollars and in 2010, the value stood at 8.42 billion dollars.
"We are happy with the growth of mobile and this certainly means Kenya is slowly moving into a cashless society. Mobile money has become a way of life for millions of Kenyans and there is still big room for growth," Safaricom's CEO Bob Collymore said in a recent interview.
Safaricom runs M-pesa, Kenya's leading mobile money service. Others are Airtel Money (Airtel), Orange Money (Orange), Yu Cash (Yu) and Tangaza, an independent firm that transfers cash across all the other networks.
The use of mobile money in the East African nation last year surged with rise in subscribers.
CBK data indicates that the number of mobile money subscribers stood at 25.3 million as of December 2013. The number rose from 21 million in January as mobile phone subscribers surged to 31.3 million, according to Communication Commission of Kenya.
Similarly, as at December, the number of mobile money agents employed in the sector swelled to 113,130, up from 85,548 in January.
These agents helped to make a total of 734 million transactions in 2013, up from 577 million in 2012.
Analysts note uptake and use of mobile money in Kenya continues to rise due to rapid integration of the cash transfer system with commercial bank's services.
Nearly all banks in Kenya have embraced the service by rolling payment platforms that allow subscribers to get financial services through the phone. They include M-Benki (Kenya Commercial Bank) and M-Shwari (Commercial Bank of Africa).
Kenya Bankers Association in a survey released last week found out that mobile phones are the main avenues through which most Kenyans (64%) receive or send money locally.