The value of cash handled by mobile money agents in the five months to May this year declined by Sh76.1 billion on economic hardships in the country.
Data published by the Central Bank of Kenya show that the mobile money agents handled Sh3.09 trillion in the period under review, down from Sh3.17 trillion transacted over the same period last year.
The two percentage point decline occurred in a period when the number of mobile money accounts neared the 80 million mark and the number of agents stood at 334,726.
The drop in the value of cash handled by agents is the first since the pandemic year and has been blamed on tough economic times that have seen the country’s inflation remain above the central bank target of 7.5 percent for 13 consecutive months.
This May recorded the biggest decline — by Sh48.2 billion to Sh615 billion — compared to the same month last year.
The weakening of the Kenyan shilling against major global currencies has led to a high cost of imports that has in turn led to an increase in the cost of goods.
High inflation and slower or no growth in wages means Kenyans are operating on reduced wages and have little to spare and send to their dependents.
The country’s economy expanded by 5.3 percent in the first quarter, a slower growth compared to the 6.2 percent recorded over the same period last year.
According to the Purchasing Managers' Index (PMI) the Kenyan private sector has experienced a downturn this year, with the headline index remaining below the 50-point mark since February.
The index measures the robustness or prevailing economic environment for business. It attributed the economic woes in the first half of the year to price pressures, high fuel costs and a weakening shilling.
According to the Communications Authority of Kenya, Safaricom’s M-Pesa enjoys an overwhelming majority of the mobile money market share standing at 97 percent followed by Airtel Money at three percent.
The agents last year handled Sh7.9 trillion, an equivalent of 59 percent of the country’s gross domestic product (GDP).