Broke Kenyans cut mobile cash deposits by Sh200bn
A man examines an empty wallet. Kenyans reduced mobile money deposits by 16.1 per cent between March and June this year as the rising cost of living exerted fresh pressure on household budgets.
Kenyans reduced mobile money deposits by 16.1 per cent between March and June this year as the rising cost of living exerted fresh pressure on household budgets.
Communications Authority of Kenya (CA) quarterly data to June shows that the total value of mobile money deposits fell to Sh1.018 trillion, down from Sh1.213 trillion deposited between January and March.
But this means there was also less money available to send, which saw individuals cut their spending by 8.8 per cent to reduce the value of customer-to-business money transfers from Sh1.08 trillion to Sh988 billion. Business-to-business transfers also fell 3.7 per cent to Sh1.7 trillion from Sh1.77 trillion in the previous quarter.
The highest drop, however, was in the cash transferred by the government-to-individuals, which fell 20.4 per cent in the quarter to Sh2.6 billion from Sh3.3 billion, as the State rolled back on many of its social relief programmes for vulnerable groups most affected by the Covid-19 pandemic.
Meanwhile, the amount of money sent by individuals to the government for services also dropped to Sh11.5 billion from Sh12.1 billion, a 4.6 per cent dip. Person-to-person transfers grew 4.1 per cent to reach Sh1.01 trillion, up from Sh970 billion in the previous quarter.
Mobile money services
“Business digitisation has led to increased adoption of mobile money services. During the period under review, the total number of active registered mobile money subscriptions rose by 4.7 per cent to stand at 34.7 million.
Similarly, the number of agents grew to 283,357 from 275,907 recorded during the previous quarter,” said the CA.
“The year-on-year comparison showed a significant growth in mobile money transfer services, mainly attributed to the increased uptake of digital payments by consumers in an effort to contain the spread of Covid-19,” it said.
At the same time, incoming international mobile voice calls fell 16.9 per cent from the financial year 2019/20 to 2020/21 as business and individual travel ground to half for several months last year, cutting inbound calls to 471 million minutes from 567 million minutes in the previous year.
However, outgoing international voice calls grew 11.3 per cent to 507 million minutes from 455 million minutes during the period, while incoming and outgoing international mobile SMS fell 6.9 per cent and 7.3 per cent respectively.
Revenue from voice retained its spot as the largest revenue stream for telecom companies, contributing to 35.8 per cent of the Sh280.1 billion in revenue, which grew 1.3 per cent from the previous year, generated by the sector, revenue from data contributed to 24.7 per cent, while SMS contributed the least revenue at just 5.8 per cent.
Meanwhile, the use of landlines shrunk 1.9 per cent to stand at 5.4 million minutes, down from 5.5 million minutes as Kenyans shifted further to use of portable mobile phones for calling.
Mobile services
“During the review period, there was a general decline in local fixed network traffic. The convenient and reliable nature of mobile services has encouraged consumers to increase their uptake for such services and operators to shift their investments from fixed to mobile voice infrastructure,” CA said.
On the other hand, shift to working from home due to pandemic-induced restrictions has seen a rise in data subscriptions, which have grown 6.8 per cent over the past quarter, with mobile data subscriptions accounting to 99 per cent of all data subscriptions.
“In order to maintain physical distance during the Covid-19 pandemic, ICT platforms originally designed and employed for other distributed uses are repurposed to maintain social connections, provide distributed services, continue to meet business needs, and for virtual education. This has resulted in increased uptake of ICT services and especially broadband services,” the telecommunications regulator said.
But the shift to remote working has seen a rapid rise in cyber-attacks as cyber criminals target vulnerable company systems as workers shift work devices away from secure office security systems to infect them with ransom ware and other malware.
“This increase in cyber threat events detected is attributed to the significant increase in targeted attacks at Internet of Things (IoT) devices; increased activity by organized cybercrime groups…and increased adoption of botnet and Distributed Denial of Service (DDoS) attack techniques,” CA said.
