S04 CAF 2 2021 Event Preview GSM_Layout 1 16/04/2021 12:24 Page 15
Kenya
MOBILE FINANCE
The evolution of mobile payment Covid-19 restrictions has meant more Kenyans conducting businesses from their homes.
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The phenomenal growth of mobile money services offered by Kenyan operators has encouraged Kenyan banks and other financial organisations to get involved. Mwangi Mumero looks at what Kenya’s banks are offering.
“M
obile banking apps allow me to withdraw cash from my bank accounts, buy phone credit, send money and receive money, among other uses – all while taking breakfast,” observed Paul Wanjala, who has rented 10 acres of land at Isara, Kajiado County, close to the Tanzanian border, in sight of Mount Kilimanjaro. An insurance executive, Wanjala works in downtown Nairobi, over 300km from his farm. “With a good trusted supervisor on the ground, one can do farming business from virtually everywhere – with mobile banking services,” he noted. Among other common financial transactions taking place via mobile platforms are payment of utility bills, payment of school fees, and borrowing mobile loans through various apps as well as transferring money to mobile wallets, such as M-Pesa or Airtel Money. Not surprisingly, Kenyan banks and other financial organisations have now started rolling out mobile banking services, riding on the existing networks or even creating their own platforms. Data from the Central Bank of Kenya (CBK) shows that total mobile money transactions in www.communicationsafrica.com
Kenya reached US$38.5bn in 2018, and the total number of mobile money accounts in Kenya reached 45.43 million. With Covid-19 restrictions last year, mobile transactions increased as Kenyan remained at home and conducted businesses from their sitting rooms and bedrooms.
Banking queues have been getting shorter, while earnings from mobile banking services have continued to grow. Mobile payments by Kenyans reached US$4.4bn in August 2020, from US$4.1bn in July and US$3.4bn in June, according to CBK. While many of these transactions were from one mobile money service to another, a huge number emanated from banks as Kenyans either transferred funds from their accounts to mobile wallets or made direct payments to a merchant from their apps. Banking queues have been getting shorter, while earnings from mobile banking services have continued to grow. According to Kenya Commercial Bank’s managing director Joshua
Oigara, this change has been mainly driven by mobile transactions. The bank’s mobile banking app offers a range of services that include payment of school fees and utility bills, transferring money to mobile wallets and borrowing of up to US$2,700. Of the US$115mn in profits after tax in the 2019 half-year results, the bank registered, US$47mn came from non-branch transactions – a 131% growth. As of June 2019, KCB’s mobile transactions accounted for 78% of all transactions, followed by agency and internet banking at 14%. Bank tellers and ATMs tied at 4% of the total transactions. “Investment in technology generated positive returns and further helped drive efficiency and deepen access to affordable financial services in all markets,” observed Oigara. Not to be left out, Equity Bank, Kenya’s largest lender by customer base, has launched its own line, called Equitel, which is very similar to M-Pesa. The bank also has an app known as Eazzy app on which transactions in 2019 grew by 28% to reach 146 million from 114 million the previous year. Equitel transactions meanwhile Communications Africa Issue 2 2021
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