Kenya’s mobile money transfer registers snail pace growth

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The amount of money transferred through mobile phones in Kenya annually has been growing at a slower rate over the past five years.

The slower growth is linked to a similar slow down in the number of mobile phone subscriptions, which has remained in single digits in each of the past eight quarters, according to data from the Communications Commission of Kenya (CCK).

An analysis of half year data since January 2008 reveals a slow growth trend, even though the amount of money transferred through mobile phones annually has been growing. This could force telecoms to turn to new revenue generation avenues as the service could be saturated.


Latest data from the Central Bank of Kenya for the first five months of 2013 shows that the value of money transacted  rose by 19.42% to Ksh719.6 billion ($8.4 billion) from Ksh602.6 billion ($7 billion) transacted between January and May 2012. This was slower than the 43.06% achieved during the same period last year.

slow-growth

“The number of new subscribers to mobile money transfer platforms is beginning to plateau. However recognising these trends, the mobile money transfer companies are now providing additional payments beyond person to person transfers,” says George Wainaina, MD, Kenswitch, a shared payments platform service provider.

Regulators, businesses and consumers have been pushing for alternative ways to make payments — including mobile phones, cards and electronic fund transfers as the region moves towards a cashless regime. People are shifting to POS payments and mobile phones to repay loans, settle utility bills and school fees.

Industry analysts said a slower growth in the number of mobile phone subscribers, who are usually signed up onto the platforms and increased money transfer costs in the country could also be to blame.

As the growth in values seems to be slowing, the number of transactions which has remained on an upward trend hit 60.34 million in May this year compared with 4.02 million transactions done in May 2008.

M-Pesa has emerged one of Safaricom’s top revenue earners. In the year ending March 2013, Safaricom’s revenues grew to Ksh124.3 billion ($1.46 billion) with M-Pesa contributing Ksh21.8 billion ($256 million), SMS Ksh10.1 billion ($118.8 million), data Ksh8.4 billion ($98.8 million) with voice revenues being Ksh77.6 billion ($912.9 million).

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