April mobile cash transfer down Sh18bn

The month-on-month value of mobile money transactions declined by Sh18.1 billion, despite the rise in subscriber numbers in April, to stand at Sh213.7 billion even as year-on-year value rose.

Data released by the Central Bank of Kenya (CBK) show that the average value of transactions per subscriber also fell as a result of the higher number of customers and the lower value of total transactions.

While the total value of transactions fell in April, it had risen in March when it stood at Sh231.8 billion compared to the previous month’s Sh208.1 billion. However, the CBK did not provide data by operator.

Safaricom general manager for financial services Betty Mwangi said she could not comment on specific numbers for April, but added that there was still a considerable opportunity for growth in the mobile money business going forward.

“I believe that the mobile money space will continue growing over the coming years. There are new opportunities in government and public transport payments, while our other traditional mobile money propositions such as ‘Lipa Na M-Pesa’ also continue registering continued growth,” said Ms Mwangi whose outfit is the largest player in the business.

In contrast to the fall in the value of transactions, the number of mobile money customers rose in April by 450,000 to 26.14 million compared to 25.69 million in March.

Compared to March, the decline in the value of mobile money transacted was 1.8 per cent in April.

However, there was positive growth in value by 14.5 per cent in April compared to the same month last year when the transactions done were worth Sh186.7 billion.

READ: Kenya’s mobile money transfers up 25pc to Sh2,400bn

Danson Njue, a research analyst with Ovum Telecoms and Media Group said the industry had not reached its peak, nor had it hit a plateau in terms of growth of the number of customers and the value of money transfer transactions.

“We expect the growth of mobile money to continue given the fact that the service providers are engaged in a lot of innovation,” said Mr Njue.
On the basis of data recorded every month of April, mobile money has experienced growth.

In April 2011, the value of the transactions was Sh86.1 billion, rising to Sh117.4 billion in the same month the following year and hitting Sh142.6 billion in April 2013.

Considering calendar years, the largest growth since 2007 – when Safaricom launched the first money transfer service – was in 2008 when it hit 922 per cent to register a total transfer of Sh166.6 billion.

The second highest growth was in 2009 when it reached 184 per cent. The growth has since 2010 been between 20 and 50 per cent.

Mr Njue said innovations linking the banking sector and money transfer services such as M-Shwari by Commercial Bank of Africa and KCB’s M-Pesa products have served to accelerate the growth of the value of the mobile money transfers.

The expansion of the money transfer service and related products has also come with an increase in the total number of customers for the cellphone service providers.

Data from the Communications Authority of Kenya show that the four telecoms operators had a combined subscription of 33.6 million by at the end of 2014.

At the end of March, Safaricom reported its subscriber base had expanded to 23.3 million, which had been reported as 22.69 million by the Communications Authority at the end of last December.

Money transfer business has grown also due to the contribution of other operators such as Finserve, a subsidiary of Equity Bank, Mobikash and Tangaza.