Number of M-PESA agents double during Covid-19 pandemic
The number of Safaricom M-PESA agents doubled last year at a time when Kenyans were seeking side hustles and odd jobs to survive the Covid-19 pandemic.
M-PESA agents grew 43.1 per cent from 173,259 in 2020 to 247,869 for the year ending 2021 at a time when most Kenyans lost their jobs on the economic impact of the pandemic.
Despite having to cut transaction fees on sending and receiving less than Sh1,000, Safaricom still paid the cash transfer agents Sh28.2 billion in M-PESA commissions up from Sh23.8 billion in 2020.
M-PESA agents make money or profit from the transaction they make through the amount of money they disburse to M-PESA users or receive deposits.
Withdrawal commissions range between Sh5 and Sh200 while deposit commissions range from Sh4 to Sh191 for different amounts transacted.
Growth of the telco’s financial muscle has become a new avenue for job prospects and the economic recovery post Covid-19.
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Safaricom has opted to support its agents thrive despite having taken up to a 45 per cent cut on low value M-PESA transaction fees in line with a deal agreed with the Central Bank of Kenya that ended the nine months of free transactions below Sh1000.
It now costs just Sh6 to send between Sh101 and Sh500, down from Sh11. Transactions of between Sh1,501 and KES 2,500 will cost Sh32 down from Sh41.
The evolution of M-PESA as a safe, affordable and convenient way to send and receive money has come a long way.
Sending money to family was a laborious process that took so long, the main mode of transferring cash was through a relative which would have to wait for the convenience of when they would travel.
In emergency cases, money orders were sent but even these had a problem of last mile since most rural areas were distant from towns and trading centres that had Posta shop or financial institution.
M-PESA came in to change this, making it cheaper, faster and more effective to give directly to one’s dependents.
It was initially used to enable Kenyans working away from their families, typically in urban areas, to get money to the pockets of their relatives in the rural areas.
However, through growth and innovation, it has now made in-roads into key transaction use cases such as paying monthly bills, receiving salaries, paying school fees and payment of government fees through formal accounts rather than handling cash.
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According to Kenya National Bureau of Statistics (KNBS) 33.5 per cent of the households received cash transfers, that is three out of every ten Kenyans who depend on their relatives for incomes.
The KNBS household survey indicates that recipients of cash transfers are mostly rural (40.2 per cent) and the money was mostly sent to mothers who mainly used the money on education and food.
The survey also showed how the money is transmitted; majority (43.7 per cent) of households received cash transfers through mobile money transfer while other preferred modes of transfer were through family or relative (39.8 per cent).
