Data from the Central bank of Kenya shows cash transacted by mobile money agents jumped 36 per cent to Sh6.2 trillion in the nine months to November.
The report issued by central bank showed that transactions at the agents rose from Sh4.6 trillion in a similar period a year earlier. The rise was attributed to the covid-19 pandemic that saw most banks try out alternative methods to reach their customers.
Kenyans have in the past four years between 2016 and 2019 increased reliance on mobile money agents for transactions Kenyans transacted Sh3 trillion on average as transactions grew modestly below 10 per cent.
However, in 2020 mobile money transactions increased, 16 per cent following the outbreak of the Covid-19 pandemic that shifted more customer settlements to mobile, boosting agency businesses that supports the sector.
Following the emergence of the pandemic, the CBK introduced reliefs on mobile money payments in March 2020 allowing free mobile money transactions of up to Sh1,000 and from banks to mobile wallets in a move to encourage a cashless payment so as to curb the spread of the virus.
The growth of mobile transactions also indicates the impact of eased restrictions with the reopening of learning institutions and resuming businesses activities, which push up the demand for goods and services.
As a result of the pandemic in 2020, economic growth slid to negative 0.3 percent in as compared to five percent in 2019. This was the first annual GDP contraction since 1992 when the output slid 0.8 percent. As a result, it led to layoffs and reduced incomes resulting in a decline spending and investment.
However, due to the easing of the restrictions put in place, recovery has started with a GDP rebound of 10.1 per cent in the second quarter and 9.9 per cent in the third quarter of last year.
The CBK is expecting the economy to grow by 6.1 percent in 2021 and 5.6 percent this year.
