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More Kenyans using mobile money transfer than banks

By James Anyanzwa | Published Mon, December 9th 2013 at 00:00, Updated December 9th 2013 at 10:54 GMT +3

By James Anyanzwa

Kenya: The use of mobile money in the country has grown sharply in the last five years to overtake banks according to a new study. 

According to the latest Fin Access National Survey (2013), more than double the number of adults use mobile phone financial services (11.5 million) compared with banks (5.4 million). The use of mobile phone financial services has more than doubled to 62 per cent in 2013, up from 28 per cent in 2009.

The use of commercial banks has also been rising over time from 13.5 per cent in 2006 to 29.2 per cent in 2013 while use of micro-finance institutions (MFIs) has remained at 3.5 per cent between 2009 and 2013.  Use of  Saccos has decreased since 2006, from 13.5 per cent in 2009 to 9.1 per cent in 2013.

According to the survey, Nairobi and Central top the list of mobile phone users with usage fixed at 84 per cent and 75 per cent respectively.

In all other regions usage of mobile money exceeds 50 per cent, according to the report compiled by among others Central bank, Financial Sector Deepening Kenya and Kenya National Bureau of Statistics.

The survey also shows that this year (2013), 32.7 per cent of the adult population accessed financial services the formal prudentially regulated financial institutions while 66.7 per cent of adults accessed financial services from any type of formal financial provider.

“Mobile money has had a dramatic impact on domestic remittances,” the report says noting that money transfers within Kenya through families and friends dropped by one-third this year (2013) from 57 per cent in 2006.

Use of buses and matatus for domestic remittances also fell to five per cent in 2013 from 27 per cent in 2006

The use of the post office also dropped to one per cent from 24 per cent in a similar period.

About 29 per cent of the adult population now uses mobile phone money transfer service for international transfers up from 13 per cent in 2009.  In addition use of informal groups has decreased from 39.1 percent in 2006 to 27.7 per cent in 2013.

The survey also reveals that over 60 per cent of those without a primary education are financially excluded as the  exclusion decreases with improved level of education.

Nairobi and Central regions stand out with the highest use rates for both mobile money and bank products.  Use rates for mobile money are broadly similar outside Nairobi and Central, ranging from 54 percent to 57.9 per cent.

An estimated one in four adults in Coast, Eastern and Rift Valley regions use banks while one in five in Nyanza and Western.  Use of Sacco services is highest in the Central region, where one in five adults uses them.