Expanding mobile money programmes in Kenya
Monday, November 25, 2013
Over the past six years, Kenya has posted significant growth in mobile phone financial services – a sector that it has in many ways helped to pioneer – and the medium-term outlook looks equally encouraging as operators move to offer traditional banking products such as savings accounts and loans. With the sector gradually converging with conventional financial services, the central bank is moving to strengthen its regulatory oversight, which could alter market dynamics.
An early success story
Since the launch of Safaricom’s M-Pesa in 2007, Kenya has become a market of reference for mobile phone financial services. A number of other telecoms operators, including Essar Telecom (YuCash), Orange (Orange Money) and Bharti Airtel (Airtel Money), have since introduced similar products – as have operators in several other countries around the continent – which has pushed prices down and boosted subscriber participation.
Kenya counted 23.75m mobile money users as of June 2013, around 75% of the adult population. The value of transactions has steadily increased over the past six years, reaching KSh152.5bn ($1.79bn) in June, and an estimated 31% of GDP is now processed through mobile money services. These systems are used to pay electricity bills, school fees and even to obtain agricultural insurance and microloans.
Source: Oxford Business Group (link opens in a new window)
- mobile finance