Kenyans transact record $33b on mobile money in 2016
Kenyans moved a record 33 billion U.S. dollars on mobile money in 2016, up from 27.8 billion dollars from the previous year, the latest data from Central Bank of Kenya showed Monday.
The surge in transactions by about 6 billion dollars consolidates the country's global position in use of the technology that has revolutionized its financial sector.
The volume of cash transacted on the platform surpasses Kenya's 2017/2018 budget, which is estimated at 25 billion dollars, underlying the role of the service to citizens and economy.
In 2016, mobile money use peaked at 3.1 billion dollars per month in December, according to the regulator's data, up from 2.6 billion dollars last year.
Christmas and New Year festivities normally give mobile money use a boost as Kenyans send and receive various amounts of cash from their loved ones.
On the opposite, the least transactions during the period were carried out in January, with Kenyans moving 2.4 billion dollars.
Kenyans on average transacted during the period 2.7 billion dollars a month up from 2.3 billion dollars in the previous year.
East Africa's biggest economy citizens use mobile platforms to perform a range of financial services that include making money deposits, remittance delivery, payment of bills, withdrawal of cash and access of microfinance credit.
Therefore, mobile money has become a necessity in the lives of Kenyans. Many citizens are unable to operate without it.
In the period of review, according to the Central Bank, the number of mobile money subscribers hit 35 million from 31.6 million in 2015, which means only less than 10 percent of the country's people has not subscribed to mobile money.
The number of agents during the period clocked 165,908 from 143,946 at the end of 2015 as the sector continued to be a key employer.
Monthly transactions similarly swelled considerably, with East African nation citizens making over 146 million transactions a month from 107 million in 2015.
Kenya has six mobile money service providers namely Safaricom, Airtel, Orange, Equitel, Tangaza and Mobikash.
Safaricom's Mpesa is the most popular, carrying out over 90 percent of the transactions. The company last week partnered with its peers in Rwanda, Tanzania and Uganda to enhance use of Mpesa in East Africa, an indication of expected growth.
The apex bank's figures paint a healthy picture of growth of mobile money but Treasury has warned that collapse of service poses fiscal risks to the economy since various financial products have been leveraged on the payment channel increasing linkage between the technology and the banking sector.
"If this system was to be compromised, the impact would be substantial considering the linkages and the corporate tax revenue for government. The financial and other institutions linked to this system would be susceptible," notes Treasury in its budget policy statement for this financial year.
Analysts expect mobile money use to sustain growth in the coming years as companies continue to innovate, people go for paperless transactions and unsubscribed embrace the service.