There is nowhere else in the world that moves more money on mobile phones than Sub-Saharan Africa
The region is currently responsible for an astonishing 45.6% of mobile money activity in the world — an estimate of at least $26.8 billion in transaction value in 2018 alone — this figure excludes bank operated solutions.
Mobile money operators like MTN, who also own the mobile network, typically charge in between 0.5–3% for their various digital services, a small price to pay for the convenience and luxury.
Penetration of mobile phones reached 98 per cent at the end of June, up from 89 per cent during the same month last year, according to the Communications Authority of Kenya (CA) statistics.
“As at June 30, 2018, the number of mobile service subscriptions in the country stood at 45.5 million up from 44.1 million reported in March 2018. This also marked an increase of 13.2 per cent when compared to the 40.2 million subscriptions recorded as at June 330, 2017,” said the CA in its latest update. “This has resulted to increased mobile penetration of 97.8 per cent during the subject quarter from 95.1 per cent reported in the preceding quarter.”
The actual number of households with at least one mobile phone is probably 10 percentage points lower than the headline figure. Which is still a very high rate of mobile penetration. For comparison, the gross rate of connectivity in India stood at 65-75% last year.
The challenge for Kenyan entrepreneurs is to think of ways to exploit this potentially lucrative platform (beyond the exciting innovations in financial inclusion).
For once Kenya has a responsible academic running the Central Bank of Kenya (CBK). Prof. Njuguna Ndung’u has exuded nothing but confidence in his first term in office. Given that finance is a confidence game, this has been a most welcome scenario. It is therefore weird that there are MPs out there crowing that his reappointment be reviewed. Given the country’s political temperature this seems like a dumb misguided move. You remove Prof. Ndung’u and you might end up with someone who is down with printing money to pay for next year’s elections. I say let’s not play politics with the Central Bank.
I fully support Prof. Njuguna Ndung’u remaining as CBK governor. Just one request, echoing Jaindi over at the Daily Nation:
A piece of advice for Prof Ndung’u. You will go down as the best governor in the country’s history if you get the banks to reduce banking spreads. Commercial banks are fleecing borrowers.