The number of mobile money subscribers in the country dropped by 600,000 last-year according to findings contained in the National Economic Survey 2024.
This saw the total number drop from 38.6 million to 38 million in 2023 while cash transferred grew by 5.5 per cent to sh5.5 trillion.
This represents a decreased of 1.55 percent of Kenya’s mobile money subscriptions indicating a shift in consumer behaviour and usage patterns of mobile money services.
“Mobile money transferred between subscribers however, increased by 19.6 percent to Sh5.5 trillion in 2023,” KNBS said in the survey.
The period that followed a government hike in tax on transaction fees saw Kenya, experience a slower growth in mobile money subscriptions since 2007.
Mobile money platforms, renowned for their speed and cost-effectiveness, have been the preferred choice for Kenyan citizens.
As the world’s second-leading mobile money economy after China, Kenya boasts major providers like Safaricom’s M-Pesa, Airtel Money and Telekom Cash.
However, the figure is likely to drop further as Kenyans will soon begin paying extra for airtime and mobile money transfer costs under the new taxes suggested by the country's Treasury.
The plans are included in the 2024 Finance Bill, as the government aims to raise an additional $2.5 billion (Sh323bn) in taxes in the financial year beginning in July.
The tax on mobile airtime and data rates has been increased to 20% from 15% in the new Finance Bill.
The Bill also seeks to increase the excise duty on mobile money transfer fees and cash transactions in banks, money transfer firms, and other financial service providers to 20percent from 15 percent.
This means that telcos will now be obliged to increase transfer and withdrawal fees to cover the higher tax burden imposed by the government.
“As of 30th December 2023, mobile money subscriptions dropped to stand at 38 million, translating to a penetration rate of 75.1 per cent. The decline is attributed to the drop in the number of mobile (SIM) subscriptions,” reads a recent report by the Communications Authority.
Similarly, CA said the mobile money penetration rate, which is the percentage of the population using these services, started at 78.2 per cent in December 2022 and gradually dropped over the year, stabilising at about 75.1 per cent from June 2023.
According to CA, prepaid plans still dominate, accounting for 65,492,294 out of the total 66,745,709 subscriptions. This leaves just a small fraction, 1,253,415, for postpaid plans.
Safaricom, the market leader, boasts 44,013,156 subscriptions out of which 42,875,208 are prepaid, with the remaining 1,137,948 being postpaid. Airtel, the second-largest provider, mirrors this trend with 19,282,993 of its 19,387,460 subscriptions being prepaid and a mere 104,467 postpaid.