Mobile money deposits jump to Sh176 billion in Kenya

GEORGE NGIGI
Business Daily Africa.

Cash deposits held by mobile phone money transfer providers have grown to more than Sh176 billion, equivalent to a tenth of the Sh1.5 trillion held by commercial banks.

New data released by the Communications Commission of Kenya (CCK) shows that mobile money deposits rose by 50.6 per cent in the past three months of last year.

This followed a rise in the maximum cash that mobile phone users could hold in their phones to Sh100,000 from the earlier limit of Sh70,000.

“The total deposits made during the period under review were recorded as Sh176 billion, representing an average of Sh58 billion deposits made per month. This is against Sh117 billion deposits made during the previous reporting period,” said CCK in a report released on Wednesday.

During the period, the number of mobile money subscribers rose by three per cent to 18.9 million.

The telecommunications industry regulator, which together with Central Bank of Kenya oversee mobile phone based transactions, increased the maximum deposit threshold following a rapid rise in the services which were launched five years ago.

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“If you have a small kiosk it makes sense to deposit the amount in the phone, the increase in maximum limit certainly contributed to the increase of the deposits,” said Duncan Njue, a research analyst at Informa Telecoms and Media.

The regulator said the number of money transfer service subscribers represented 70.3 per cent of the total mobile phone customers.

“This rapid uptake of mobile money is an indication of the continued demand for the service particularly by low income earners who do not have access to banking services,” said the CCK.

The number of agents who facilitate the mobile phone transactions rose to 47,997 from 44,922.

Mr Njue said the increased distribution network and mobile penetration also contributed to the rise in deposit amounts.

“The mobile money service has a lot of demand given that there are so many people without bank accounts so it becomes an option for them,” said Mr Njue.

The final quarter of last year also saw mobile phone companies partner with global money transfer institutions to facilitate international transactions.

“Partnerships with international players such as Western Union have seen persons abroad choose this service as they are cheaper and convenient,” said Mr Njue.

The Kenyan market has been hailed for the success of mobile money transfer services following the introduction of M-Pesa in 2007.

gngigi@ke.nationmedia.com