The amount of cash transacted by Kenyan mobile money agents in the nine months to September went up by 17.6 percent, pointing to the rising popularity of the digital means of conducting businesses.
The Central Bank of Kenya (CBK) data indicates that the cash handled by the mobile agents hit Sh5.91 trillion, a sizeable jump from Sh5.03 trillion in similar period in 2021.
The rapid growth in mobile cash transactions shows that digital deals are increasingly gaining traction, deepening financial inclusion. More people are using mobile platforms to send money and deposit hard cash with the mobile agents to enable the users make payments such as school fees, rent, water bills and government services.
In its latest findings, Financial Access (FinAccess) Household survey shows higher adoption of mobile money accounts than banks.
Nairobi, the report says, has the highest usage of mobile money services at more than 93.9 percent of the population, followed by Kiambu (91 percent), Murang’a (90.4 percent) Nyeri (89.8 percent) and Mombasa (88.6 percent).
Mobile money services are popular in areas with fewer financial service providers and products such as Garissa, Wajir, Tana River and Marsabit where agents are available.
The CBK data shows that the total value of transactions in September slowed down to Sh674.47 billion compared to July and August, which recorded Sh722.5 billion and Sh677.36 billion, respectively.
This matches a trend in cash in circulation in the economy that also recorded a jump ahead of the August General Election, touching a record high of Sh267.7 billion in July.
The CBK data showed cash outside the banking system rose by 6.5 percent to Sh267.7 billion in July from Sh251.4 billion in June, and slightly reduced to Sh257.1 billion in August.
The record figures seen in the two months point to the possibility that Kenyans withdrew cash in anticipation of poll disruptions.
The spike also points to the possibility that politicians withdrew large sums for their campaigns. Politicians spend millions on voter facilitation, advertisement, vehicle, equipment branding and poster printing, among other costs.
Kenya has recently achieved full interoperability of paybills allowing M-Pesa, Airtel Money and T-Kash customers to make payments for utilities across networks, widening the service usage. The service came after the till interoperability, which allowed customers to pay for goods and services across different networks.
The Kenyan economy is largely made up of the informal sector, and the adoption of mobile money to receive payments has reduced dependence on cash and payment cards while giving commercial banks a run for their money.