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Kenyans slashed the number of mobile money transactions by 6.2 percent in just two months of the Central Bank of Kenya (CBK) lifting a waiver on charges for low-value cash transfers.
Data from the sector regulator shows that Kenyans dealt Sh567.99 billion in February, which is Sh37.7 billion less than the Sh605.69 billion worth of transactions recorded in December following resumption of normal charges for such services.
The government in March last year waived money transfer fees for deals below Sh1,000, those between bank accounts and mobile money wallets, and doubled the daily transaction limits to Sh300,000 to discourage use of hard cash in a bid to stem the spread of Covid-19.
While the waiver of the charges on transactions between mobile money wallets and bank accounts remains in force, the CBK in December allowed telcos to resume normal charges for the low-value mobile transactions, which constitute the majority of all mobile money transfers.
However, transactions below Sh100 between Safaricom, Airtel and Telkom customers are still free.
Mobile money transfers
The CBK in December noted that the waivers saw mobile money transfers among individuals rise 87 percent between February and October.
“A significant increase of mobile money usage has been noted over the period the measures have been in place, demonstrating that they were timely and effective. For instance, the monthly volume of person-to-person transactions increased by 87 percent between February and October 2020,” the CBK announced in December.
“Over this period the volume of transactions below Sh1,000 increased by 114 percent, while 2.8 million additional customers are using mobile money. Business-related transactions also recorded significant growth over the same period,” it said.
End of free money transfers has seen the volume of transactions fall by Sh15.3 billion in the first month alone and a further Sh22.3 billion in the second month.
Sh605.69 billion
This saw the value of mobile money transactions drop from Sh605.69 billion in December to Sh590.36 billion and Sh567.99 in January and February respectively.
At the same time, resumption of charges on small amounts of money transfers saw the number of transactions drop 9.5 percent from 181.37 transactions in December to 164.2 million transactions in February.
However, this came despite an additional 1.15 million new mobile money accounts being registered in the two-month period, which has pushed the total number of registered accounts from 66.01 million in December to 67.16 million in February.
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