The latest data from the Central Bank of Kenya (CBK) reveals a significant decline in the value of mobile money transactions in the country. Over the past 12 months leading up to February 2025, the total value of mobile money transactions dropped by 19.6% from KES 790.8 billion to KES 636.2 billion, marking the lowest monthly figure in over a year.
Despite this decline in transaction value, the reach of mobile money services has continued to grow in Kenya. The number of active mobile money agents increased from 320,182 to 394,853, while the number of subscriptions rose from 77.3 million to 84.6 million during the same period.
The shift in usage patterns suggests a changing landscape for mobile money in Kenya. Once celebrated for its role in promoting financial inclusion since the launch of M-PESA in 2007, mobile money now faces challenges from factors such as slowing household spending, increased competition from traditional banks and fintech companies, and evolving consumer behaviors.
The increase in the number of mobile money agents and subscriptions indicates improved access to financial services. However, the continued decrease in transaction value highlights underlying challenges. Core inflation, excluding volatile food and energy prices, has been on the rise, reaching 2.2% in March 2025 from 2.0% the previous month. This increase in living costs has put pressure on household budgets, leading many to cut back on non-essential mobile money transactions.
While more Kenyans are opening mobile money accounts, they are now conducting smaller transactions or using their wallets less frequently. The growth in account numbers no longer translates to higher transaction volumes, indicating a shift in how money is being managed by consumers.
The expansion of the agent network, especially in smaller towns, has resulted in reduced earnings per outlet as transaction volumes are spread among more agents. However, this broader reach has not reversed the overall trend of declining transaction values.
For larger transactions such as rent payments, tuition fees, and business transfers, many Kenyans are opting for bank apps or mobile banking platforms instead of traditional mobile money services.
Despite these changes, Safaricom’s M-PESA continues to dominate the mobile money market in Kenya, holding a 91% share as of December 2024, according to the Communications Authority of Kenya. Airtel Money follows with an 8.9% share.
As mobile money usage continues to evolve in Kenya, it will be crucial for service providers to adapt to changing consumer preferences and economic conditions to ensure sustained growth and relevance in the market.
(Source: TechCabal)
