Connect with us

Hi, what are you looking for?

Capital Business
Capital Business


Kenyans prefer phone cash transfers

NAIROBI, Kenya Jun 8 – More than half of Kenyan mobile phone users think mobile cash transfer services will soon replace the need for banks, a new survey has shown.

The Global Telecoms Insights 2010 survey cites convenience and ease of use as the main reasons why mobile cash transfer services have become popular with subscribers.

TNS International Global Director for Rapid Growth & Emerging Markets James Fergusson says this is most evident in rural areas where the population is quick to adopt and use technology to uplift their economic status.

“Access to financial services helps people look after their money and grow their wealth because if it is in your pocket you are most likely to spend it on unnecessary things,” Mr Fergusson said.

The survey is not too far off the mark given the rise of mobile money transfer since Safaricom launched the globally acclaimed M-PESA in 2007.

Originally developed as a money transfer tool, the service has grown to become an alternative payments channel that now enables payments to utility companies and micro-finance providers.

“We are now hearing of people paying for their dowry via M-PESA,” Safaricom CEO Michael Joseph once remarked.

In its three years, M-PESA has transferred close to Sh405 billion matching up well against conventional banks. It has managed to get nine million active subscribers, which can be compared, to 8.4 million bank accounts.

The potential of mobile money transfer has also seen Zain Kenya announce plans to spend Sh350 million this year to upgrade its Zap infrastructure.

Advertisement. Scroll to continue reading.

“The advantage Kenya has with money transfer systems is that the people are already in the mind frame of using the mobile device as a banking tool,” Mr Fergusson said.

He said the demand for financial services is now forcing banks to become innovative in an effort of tapping into the potential of mobile money transfer.

In the last one month, two banks have formed partnerships with Safaricom and its M-PESA service allowing customers to deposit money into their accounts, access salary advances and at the same time facilitate real time deposits from M-PESA directly to an account.

Dr Moses Ochieng, an analyst with Financial Sector Deepening Kenya, said this was an important step for consumers as it now gives them an opportunity to have their money earn interest as opposed to sitting idle with a mobile operator.

“These new partnerships are vital because the users can now ear interest through this new banking system,” Dr Ochieng said.

He said the new partnership between banks and mobile operators would also play an important role in fast tracking agency banking, as banks will look to use agents to deliver financial services.

“The hidden wealth in Africa is the shopkeeper. If agent-banking picks up the possibilities in financial services are limitless,” he said.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...