M-Pesa controls 92pc of billions sent by Kenyans in diaspora
What you need to know:
- Diaspora remittances through M-Pesa jumped 36.6 per cent to Sh395.7 billion in the 12 months to March compared to a similar period of the previous year.
- This is an equivalent of 92 per cent of the total Sh432.17 billion sent into the country from the diaspora in the 12 months through all channels including banks and other cash transfer services.
- The Central Bank of Kenya (CBK) last year stated that diaspora remittances hit $3.7 billion (Sh449.16 billion).
Safaricom’s mobile money service M-Pesa handled about 92 per cent of cash sent by Kenyans in the diaspora in the year to March, deepening a shift from the old cash transfer companies that had for decades dominated the business such as US firms, Money Gram and Western Union.
Fresh data by Safaricom shows that diaspora remittances through M-Pesa jumped 36.6 per cent to Sh395.7 billion in the 12 months to March compared to a similar period of the previous year.
This is an equivalent of 92 per cent of the total Sh432.17 billion sent into the country from the diaspora in the 12 months through all channels including banks and other cash transfer services.
This leaves M-Pesa taking the giant share of the money being sent back home growing its revenues, even as it continues investing and creating partnerships to expand its products beyond borders.
“In line with our focus on expanding our customers’ digital lifestyles, we introduced the M-Pesa Global Pay Virtual Visa Card linked to customers’ accounts.
The M-Pesa GlobalPay virtual card enables payments to International online merchants for goods and services using the virtual card details,” Safaricom stated in a newly released business sustainability report.
The company, however, did not directly link the new product to growth in amounts remitted to the country through M-Pesa.
Diaspora remittances through M-Pesa have grown sharply over the past four years, from 2018 when Kenyans remitted Sh119 billion through the platform, to 2019 when the amount grew to Sh158 billion, and the year to March last year when the figure hit 290 billion.
The Central Bank of Kenya (CBK) last year stated that diaspora remittances hit $3.7 billion (Sh449.16 billion).
CBK diaspora remittances survey 2021, relying on data from 2019, stated that the majority of Kenyans remitted cash back to families using mobile money, money transfer companies, and banks.
“Whereas mobile money operators are the most frequently used service providers, the proportion of funds transferred through the top three service providers are almost similar. On the most preferred service provider, the respondents indicated that M-Pesa/Safaricom is the most preferred service provider, selected by 20 per cent of the respondents, followed by banks, WorldRemit, Wave, Sendwave and Western Union,” the survey stated.
It added that money transfer companies made up a quarter of the proportion of cash remittances by 2019, while banks and mobile network operators followed taking up 24 per cent each.
The survey also observed that 20 per cent of Kenyans preferred using M-Pesa to remit cash, while 16 per cent preferred banks and an equal number WorldRemit.
The new data now reveal more Kenyans have joined the use of mobile money, with the shift also growing M-Pesa revenues, which hit Sh107.7 billion in the year to March from Sh82.6 billion during the previous year, forming nearly 40 per cent of Safaricom’s revenues.