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Mobile money deposits down on cash crunch

NEWS
By Frankline Sunday | September 28th 2021

Report by industry regulator shows Sh195 billion drop between March and June. [Elvis Ogina, Standard]

Deposits in mobile money wallets fell by Sh195 billion between March and June this year, indicating the financial pressures felt by a big portion of subscribers.

Data from the Communications Authority of Kenya (CA) shows that total deposits held in M-Pesa, Airtel Money and T-Kash fell from Sh1.2 trillion in March to Sh1 trillion at the end of June.

The 16 per cent drop was the largest in years and coincided with the government tightening restrictions introduced last year to slow the spread of the Covid-19 pandemic.

“The year-on-year comparison showed a significant growth in mobile money transfer services, mainly attributed to the increased uptake of digital payments by consumers in an effort to contain the spread of Covid-19,” CA says in the sector statistics report.

Mobile money transactions registered declines across the major service segments.

The value of government-to-customer transfers fell from Sh3.3 billion to Sh2.6 billion, marking a 20 per cent drop.

Transactions between customers and businesses similarly recorded a drop in value from Sh1 trillion to Sh988 billion.

However, overall active registered mobile money subscriptions across all three networks rose by 4.7 per cent to stand at 34.7 million as of the end of June 2021, while mobile money agents rose to 283,357 from 275,907 recorded during the previous year.

The CA industry data further indicates that total local mobile voice traffic rose to 19.51 billion minutes from 19.48 billion reported between January and March this year.

Mobile voice traffic similarly increased by 21.2 per cent to post 76.8 billion minutes during the 2020-21 financial year from 63.4 billion minutes posted in 2019-20.

“During the 2020-21 financial year, the government reduced VAT on telecommunication services from 16 per cent to 14 per cent that resulted in a decrease in mobile tariffs hence increased use and uptake of local mobile voice services by consumers,” the sector report says.

Leading telecommunications service provider Safaricom lost 0.2 per cent in market share, with its 41.3 million subscribers taking up 64.2 per cent of mobile subscriptions in the country, while Airtel gained 0.3 per cent to 26.9 per cent on 17.3 million subscribers at the end of June.

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