The number of dormant mobile money accounts increased by 926,000 last year driven by defaults on digital loans that pushed subscribers to deactivate their SIM cards.
Central Bank of Kenya (CBK) data shows that 40.93 million out of the 68 million registered mobile money accounts were inactive as of December 2021.
This was up from 40 million accounts a year earlier when registrations stood at 65.7 million.
The telecommunications industry regulator, the Communications Authority of Kenya (CA) attributed the rise in dormant accounts to the coronavirus economic shocks that prompted subscribers to default on short-term terms.
“This (increase in inactive mobile money accounts) is attributed to the increase in the number of mobile loan defaulters whose SIM cards remained inactive during the reference period,” CA said in last year’s review of the industry.
The CBK data shows that Safaricom #ticker:SCOM had the highest customer retention rate among the mobile money operators, with 62.5 percent of them or 26.22 million being active over 30 days.
The telco runs the popular M-Pesa platform which controls a 99.9 percent market share or Sh2.206 trillion out of the total value of transactions of Sh2.208 trillion.
Overall, the industry has kept 39.7 percent of the total registered mobile money wallets of 68 million. The CBK data shows that Safaricom dominates the sector in terms of the value of mobile money transactions
M-Pesa’s growth has eaten into the market of Airtel Money and Telkom’s T-Kash which handled Sh2.2 billion and Sh120 million respectively last year.
The dominance of M-Pesa has prompted Airtel and Telkom to push for regulatory changes alleging that Safaricom is abusing dominance.
CBK disclosed that it will launch a national payment system that will force Safaricom to accept cash from Airtel and Telkom on its Lipa na M-Pesa, enabling a seamless transfer of money through merchants.
Subscribers currently send money across mobile phone networks but Safaricom has been uncomfortable with the push to open M-Pesa outlets to rival firms.
Mobile money has over the years grown to be a lucrative revenue stream for telcos as customers use them to send cash, pay for goods and services, and take short-term credit.