Mobile money agents in Kenya quitting business, says poll

NAIROBI, KENYA: Mobile money agents are a dissatisfied lot and given a choice, many would quit the business.

High operational costs, exclusivity demanded by mobile operators, numerous network down-times and insecurity are among the challenges they face, and as a result, close to half of operators polled do not see themselves staying in the agency business long term.

The challenges, cited in a new survey, have played part in reducing their monthly profitability, to an extent that while the business in Kenya can be said to be mature, they are making less than their counterparts in Tanzania and Uganda.

The study released last week showed that more than half of the agents in Kenya plan to quit. The survey by MicroSave and The Helix Institute of Digital Finance also revealed a high turnover among agents, with many leaving and others joining the industry, such that more than a third of the agents are less than a year old in the business.

This, according to the survey, is a pointer of dissatisfaction among the huge army of agents that played a critical role in building the mobile money business in Kenyan and making the country a global reference point.

“Only 58 per cent of agents said they thought they would be an agent in one year’s time, which is significantly lower than Uganda and Tanzania and shows dissatisfaction,” said the Agency Network Accelerator Survey: Kenya Country Report 2013.

Kenyan agents also report low revenues and profitability compared to their counterparts in Uganda and Tanzania, with the report noting that Kenyan agents have found it difficult to thrive on revenues from mobile agency business alone.

Many of the agents interviewed said the terms issued by mobile operators, some of them requiring agents not to offer services to other operators, have seen them get low returns.

“Compared to Uganda ($US136) and Tanzania ($US126), Kenyan agents make the least amount of revenue ($117) per month. in Kenya, 17 per cent of agents are not profitable, which is higher than the 13.5 per cent in Uganda and the five per cent in Tanzania. High price levels in Kenya mean it is hard to have a business solely dedicated to agency, business” said the report.

“Tanzanian agents earn revenue from multiple providers due to high levels of non-exclusivity. The threat of losing their till was enough to keep most of Safaricom’s agents exclusive.”

According to the report, over 90 per cent of agents in Kenya are exclusive to Safaricom, with just about four per cent being non-exclusive.

Agents surveyed said unreliable service is also a major challenge, saying they experienced downtimes close to nine times per month.