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Monday, November 17, 2014

Kenyan Mobile Money Deals Reach US $24.3 Billion in August

From August 2013 to August 2014, the value of mobile money transactions in Kenya rose by 29 percent to KES 2.2 trillion (US $24.3 billion) from KES 1.7 trillion (US $18.8 billion), according to a recent report. Analysts say that growth in the industry continues to be exponential, with increased adoption of money transfer services by individuals and businesses. The service is increasingly being integrated into the different forms of financial transactions, from commercial banking to micro-insurance, local and international money transfers and bill payments. Safaricom currently dominates the mobile money market, with over 19 million customers and over 80,000 agents out of the total 124,708 representatives registered in Kenya. Lipa Na M-Pesa, Safaricom’s bill paying service, has 139,000 merchants on board, of whom 32,300 were active on a 30-day basis. Oscar Ikinu, CEO of mobile money service Tangaza Pesa, stated that many services in both the financial and non-financial sectors—for example, transport—are now increasingly relying on mobile money for execution.

We have long been chronicling the remarkable expansion of the mobile money economy in sub-Saharan Africa, and these results clearly underscore the trends we have been seeing. Kenya has been the regional leader in adoption of this service, and at this point, while the figures lend vividness to the narrative, the sheer size of the Kenyan mobile money sector comes as little or no surprise to observers. Whether or not it can be definitively established that the growth is in fact “exponential,” no one can doubt that the rate is very vigorous, and a 29 percent increase in the number of transactions in one year indicates current health and future potential.
What is more noteworthy about the present situation is the increasing involvement of the business sector. Originally, mobile money caught on in Africa due to the large number of “unbanked” potential customers, mainly private individuals and small farmers, who for the first time had the ability to make non-cash payments. Now analysts and at least one major industry player are saying that mobile money is moving into a larger sphere, in which presumably larger amounts of money will be moving than previously.
“The fact that the Kenyan business world is embracing mobile money perhaps indicates that many businesses in the country are still essentially “mom and pop” operations; however, we believe that it also indicates something more: that in a growing, “mobile-first” economy, businesses, even including the financial sector, cannot afford not to opt into the mobile money economy. If they do not participate, they will almost certainly be left out of very significant opportunities.”
John Dorfman,
Editor-in-Chief,
The Tarifica Alert

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. 

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1 comment:

  1. This is pretty impressive stats for a developing economy.

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