Kenya Reports Robust Mobile Money Growth

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Mobile-based money transfer services in Kenya continue to grow quickly as the number of transactions increased some 33 percent in 2012 over the previous year, according to the central bank’s Financial Stability Report. The bank said the rising number of mobile money users spurred growth as almost 50 percent of the population (21.1 million citizens) used the services, a 10 percent rise in 2012.

While the overall number of transactions continues to rise, the average value per transaction dipped from KSh2,700 (US$30.87) in 2011 to KSh2,672 (US$30.55) in 2012. The bank actually attributes that figure to more lower income individuals using transfer services. Low income individuals adopting mobile money is a significant component of financial inclusion outreach and a positive sign as more individuals are brought into the payments system, the bank said.

The report also highlighted the number of agents and ATMs also rose in 2012. ATM transactions doubled to 224.6 million in 2012 as financial institutions deployed more machines to the tune of an 8-percent increase.

The bank’s numbers point to an evolving payments market and one that has adopted mobile payments as arguably the primary payment instrument. While payment cards and ATMs are gaining traction in Kenya, it appears the country has leapfrogged the stage in a country’s payments maturity where payment cards and ATMs are dominant. Missing this step in the payments evolution could be seen in many other developing countries where mobile penetration significantly outweighs either payment card or checking account penetration.

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