3.35trillion. This is the amount of money moved via mobile money transfer in the last one year. This represents a 20% growth from the previous year to hit the 3trillion mark. This is according to the most recent data released by CBK which mathematically translates to Ksh280billion every month, Ksh9.2billion every day and approximately Ksh383 million every hour. This is in comparison to close to 7.7 billion moved per month at the same time last year.
The increase has been attributed to the high uptake of mobile loans. Mobile banking apps such as M-Shwari, Equitel, M-Co-op Cash, and KCB M-Pesa have greatly transformed how Kenyans access loans. Consumers no longer need to fill lengthy paperwork, pledge collateral or undergo vetting by a credit officer to access a loan. There are also standalone mobile lending apps such as Branch, Tala, and Saida among others, which also issue short-term loans via mobile money and charge a processing fee.
However, Cytonn investment analysts project an increase in the uptake of mobile loans despite the recent move by the central bank to cap interest rates which has made small borrowers and small entrepreneurs high-risk borrowers.
“We expect to record an increase in mobile credit lending driven by accessibility of the loans, high demand from the middle-income population, and instant loans that take five minutes unlike long approval processes in traditional banking methods,” Cytonn said in a research note released earlier this week.
Mobile money has come of age to be used not only as a platform to send or receive money but also as a loan disbursement tool, paying utility bills, receiving dividends among many other uses.
Some of the mobile money platforms doing well include Branch which boasts of a Ksh2billion loan book, Mkopo rahisi at 3.5billion, KCB’s KCB M-Pesa at 17billion, Equity bank’s Equitel at 20.8billion, and Co-op’s M-Co-op Cash loan book reported at Ksh3billion in June 2016.
The rise of mobile money is seen as an indicator of growth in both financial and digital aspects as it shows an acceptance of the fusion of technology and finance.