Mobile Money Transactions in Kenya in 2023 Declined For The First Time in 17 Years – Report
A recent report has revealed that there was a notable decline in mobile money transactions in Kenya in 2023, which marked the first decrease since the inception of mobile payments in Kenya almost 17 years ago.
The Central Bank of Kenya (CBK) reported that the cash agents in the 11 months leading up to November 2023 amounted to KES 7.165 trillion ($45.4 billion). This represented a 0.5 percent decrease from the KES 7.2 trillion ($45.6 billion) recorded during the corresponding period in 2022.
Over the years, the use of cash as a means of payment has continued to increase in Kenya. The country has been at the forefront of digital transactions in Africa and is the second-leading mobile money economy in the world after China.
With the launch of M-Pesa in 2007, Kenya became a global forerunner in mobile payments. M-Pesa grew to become the primary method of payment for small-scale transactions in Kenya. This led to an overhaul of the dynamics of the country’s economy by eliminating the reliance on physical cash and promoting financial inclusion.
However, the recent notable decline in mobile payments in Kenya can be attributed to the fact that Kenyans have been grappling with an elevated cost of living, facing significant increases in essential commodities like food, fuel, and electricity.
The surge in prices, particularly for essential commodities, has undoubtedly strained household budgets, leaving many grappling with financial uncertainties.
Additionally, the Central Bank of Kenya (CBK) has maintained high interest rates, and have directed M-Pesa to increase its transaction limit, which has also contributed to mobile transactions in the country.
Effective 15 August 2023, the daily mobile transaction limit per user in Kenya was Ksh500,000 ($3,404), up 66% from $2,041 on the most popular mobile money platform M-Pesa. This was the second time Safaricom got a nod from the CBK to raise its transaction limit.
The move by the Central Bank of Kenya (CBK) to raise mobile money transaction limits is likely to accelerate the rate of inflation in the country, even as citizens continue to suffer through a struggling economy.
