The value of monthly mobile money transactions crossed the Sh400 billion mark for the first time in July, official data shows.
Central Bank of Kenya (CBK) data shows that the transactions that include cash transfers and payments for goods and services amounted to Sh450.98 billion, reflecting a 14.96 percent increase from Sh392.17 billion in June.
The mobile money volumes were rising month-on-month since May, following a sharp dip to Sh308 billion in April when Covid-19 restrictions were at their toughest, including a movement ban into and out of Nairobi, Mombasa and Kwale, restricted social gatherings and a dusk-to-dawn curfew.
Analysts link the record high in the month to the increased volume of trade as the economy continues to reopen following the easing of some restrictions from May, while there has also been an increase in the use of cashless payments in the country as people avoid handling cash to prevent the spread of the respiratory virus.
Households have also dug deeper into their cash savings held in banks following widespread job losses and pay cuts. This has also coincided with the removal of charges for bank-mobile wallet transfers, which has encouraged more people to utilise mobile money instead of visiting ATMs to withdraw cash.
“The economy has not been doing well and now a lot of people are being forced to dig into their assets like fixed deposits to finance day-to-day expenditure,” said Ken Gichinga, the chief economist at Mentoria Economics.
Although July saw a record in value of transactions, the year-to-date growth of mobile money volumes is still lagging 2019’s growth.
In the first seven months of the year, Kenyans have transacted a total of Sh2.595 trillion on their mobiles, a 3.7 percent growth from last year’s Sh2.502 trillion over a similar period.
The 2019 volumes represented an 11.1 percent increase compared to the corresponding period in 2018.
Mobile money platforms were, in the formative years, used primarily for person-to-person cash transfers but are now used for payment of services and goods, a shift that has led to the growth in the amount of money moved through the wallets.