Kenya’s mobile money market worth $8 billion
- Parent Category: Mobile
- Published on 11 October 2012
Kenyans deposited 672 billion shillings ($8 billion) through mobile money services in the year ending June 2012, recording a 38% jump from the 486 billion shillings ($5.7 billion) deposited in the previous year.
Introduced five years ago by telco Safaricom through its service; M-pesa, mobile money transfers have become a competitive revenue stream for operators in the East African nation, where millions of people remain unbanked.
According to the 2009 National Financial Access Survey, 32% of Kenya's bankable population is still out of reach of financial services.
The latest statistic from the Communications Commission of Kenya (CCK) indicate that mobile money subscriptions rose by 12% to 19.5 million users as transfer agents rose by 15% to 49,079.
“The mobile money transfer service experienced positive growth during the quarter under review. Owing to the nature of this service to provide an inexpensive and secure way to transfer money as well as operators keenness to extend the service to the unbanked population, it is expected that that the service will continue to record positive growth in the coming periods,” said CCK.
In the year under review, Kenya's ICT sector recorded significant growth with mobile telephony services penetration rising to 75.4%. Internet subscriptions rose by 11% from 12.5 million recorded in the previous year.
“The ICT sector has continued to be on an upward pedestal as witnessed by the growth in subscriptions. With this expansion, operators will be compelled to formulate innovative products and services to meet the customers’ needs and this is likely to boost the sector even further,” said the CCK.
The fixed line network market and postal and courier sector, however, continued to record a downward trend due to stiff competition from the mobile sector. Total fixed lines (fixed terrestrial lines and fixed wireless) recorded an annual subscription decline of 29% to 262,711 while the number of local letters sent annually dropped by 32%.
While Kenyans were not sending letters as much as they did last year, they easily accessed the internet through their mobile phones due to increased mobile subscriptions and the ease of accessing the service through mobile phones.
“This growth is largely contributed by the popularity of social media mainly used by the young generation and it is expected that growth in Internet usage will continue with increased subscriptions,”said CCK.
The CCK however says formulating innovative products that respond to customers’ needs could reverse the negative trend experienced in the postal services sector.