Kenya tops the globe with the highest number of adults holding a mobile money account at 58 per cent, followed by Somalia’s 37 per cent — because of its well-entrenched hawala system — Uganda at 35 per cent and Tanzania at 32 per cent.
Furthermore, Kenya is now ranked top in Africa in terms of ease of access to financial services, thanks to the high uptake of mobile money, according to the World Bank 2014 Global Findex report.
Eight out of every 10 Kenyan adults or 75 per cent is banked — through bank and mobile money accounts — beating South Africa (70 per cent), Nigeria (44 per cent), and Ghana with 40 per cent, the statistics show.
The 2016 FinAccess survey credits mobile money services for the threefold growth in Kenya’s banked population to 75.3 per cent from a low of 26.1 per cent in 2009.
“Compared to banks and informal groups, which are equally popular, nearly twice as many Kenyans use mobile money,” says the 2016 FinAccess report.
Kenya is regarded as the cradle of mobile money, where M-Pesa was launched on March 6, 2007.
But despite high uptake of mobile money in Kenya, experts say there is still headroom for further growth.
Retail payments for goods and services are now seen as a great opportunity to deepen mobile money, says the World Bank report.
The report calls for digitising payments for utility bills, such as electricity and water, school fees, agricultural sales, shopping.
“School fees are another regular payment made by many households in developing economies. Only a few countries have a significant share, making the payments digitally — either directly from an account at a financial institution or through a mobile phone,” said the World Bank report.
The World Bank further reckons that payments for the sale of farm products, especially in East Africa agriculture-based economies, offer another opportunity for increasing account ownership among the unbanked.
“Digital payments for the sale of agricultural products have particularly taken off in Kenya, Tanzania and Uganda,” said the report, attributing the practice to the widespread use of mobile money in the region.
Mobile money has also changed how we access loans. Financial service providers are now riding on mobile cash platforms to issue cheaper micro-credit.
Matt Flannery, co-founder of peer-to-peer lending platform Kiva, has launched the app dubbed Branch in Kenya, offering entrepreneurs small loans of up to Sh50,000 disbursed through M-Pesa and repayable in six months.
Users need to download Branch from Google Play, log-in with their Facebook accounts and can begin applying for small loans at a one-off fee of between six per cent and 12 per cent depending on loan and repayment period.