Mobile payments in August posted the largest month-on-month drop this year, coming after intensive political campaigns in July.
Latest Central Bank of Kenya data shows cash transacted through mobile money channels dropped by Sh22.55 billion, or 7.3 per cent to Sh286.34 billion compared with Sh308.89 billion in July amidst reduced business activity on political uncertainty.
The value of payments in July was the fourth largest ever after a record Sh320.18 billion in March, December 2016’s Sh316.77 billion and May’s Sh315.45 billion.
The drop in August may also be attributed to reduced business activity due to poll jitters in the wake of credit rationing by risk-averse commercial banks following capping of loan charges in September 2016.
Private sector activity has been declining since May, the Stanbic Bank Kenya Purchasing Managers’ Index (PMI) shows, citing “elevated political temperatures and lack of access to credit for firms and households”.
Companies and individuals have embraced mobile money payments—where Kenya is a world leader_due to enhanced efficiency–compared to plastic cards whose growth has been nearly flat.
Financial services firms are increasingly relying on mobile platforms to manage micro accounts, build customer deposits and broaden their customer network, former CBK Governor Njuguna Ndung’u wrote in a policy paper in July.
Mobile payments rose by Sh410 billion or 12.89 per cent to Sh3.59 trillion in 12 months through August, the CBK data shows. About Sh2.41 trillion was transacted between January and August, Sh240 billion or 11.06 per cent more compared to a year ago.
Mobile money platforms include Safaricom’s M-Pesa, Airtel Money, Telkom Money, Equity Group’s Equitel, Tangaza and MobiKash.