The value of cash handled by mobile money agents in the five months to May rose by nearly Sh1 trillion compared to a similar period last year, indicating the continued recovery of the economy in the second quarter of this year.
Central Bank of Kenya (CBK) data show agent transactions in the period rose by 56.1 percent or Sh982.76 billion to Sh2.73 trillion from Sh1.75 trillion in the corresponding period in 2020, with higher volumes in May boosting this year’s numbers.
May recorded a higher amount of transaction volumes compared to the first four months of the year, the CBK data shows.
The value of transactions in May rose by Sh34.47 billion (6.9 percent) to Sh536.69 billion from Sh502.22 billion in April, overturning a consistent month-on-month drop since December 2020.
Analysts have tied the jump in May to better flows of government payments and increasing diaspora remittances, which led to more money in the hands of consumers and businesses.
“The diaspora remittances hit record Sh34 billion in May, which also boosted cash in circulation,” said Ken Gichinga, chief economist at Mentoria Economics.
The remittances represented a 22 percent jump from the corresponding month last year, supported by higher flows from the US and Saudi Arabia.
This is the first time diaspora remittances have crossed the $300 million mark, continuing to defy expectations of a dip due to the Covid-19.
The higher amount in mobile transactions is also tied to the fact that banks are still not charging fees for transfers between accounts and mobile wallets.