Kenya has 58.4 million mobile money subscribers, this is more than the total population of Kenya.
According to the 2019 census data, the country has 47,564,296 citizens.
The number grew by 49.5 billion over the past decade from 1.3 million in December 2007.
On the back of the strong pick-up in mobile money subscriptions, Kenya has seen very strong growth in the number and value of mobile money transactions.
According to the EFG Hermes report, the number of transactions increased from Sh2.5million in 2007 to Sh1.8billion in 2019, while the gross value of these transactions increased from Sh14.8bn in 2007 to Sh4.3trn in 2019.
This represented 44 per cent of the country’s GDP in 2019.
According to the Communication Authority of Kenya (CA), Safaricom’s M-Pesa had an 88 per cent share of mobile money subscriptions , despite its share of mobile money agents being 75 per cent.
“While M-Pesa continued to dominate digital payments, it has had to share the digital credit space with a number of banks and non-bank lenders,” the report said.
According to a report by The Kenya Financial Sector Deepening(FSD Kenya), there are over 100 digital credit lenders in the country.
The digital credit’s uptake has increased significantly over the years; according to the 2019 FinAccess Household Survey of Kenya, 8.3 per cent of respondents had used a digital loan app for credit.
The cost of using mobile banking and digital lending apps is however very high at around 15 per cent interest per month for some of the lenders like Tala.
The survey showed the bulk of the borrowings from the digital platforms is below USD50(Sh 500), with many as low as USD1.50.(Sh 150) therefore are mainly accessed by low income earners.
The high interest costs therefore are a barrier to the main market in the digital credit sector.
According to a survey International Monetary Fund(IMF) mobile money is increasing financial inclusion in the Sub Saharan Africa region.
IMF recommended strengthening of consumer protection and regulatory frameworks to maintain financial stability.