Mobile Money Deposits Hit Sh6 Trillion as Fintech Competition Heats Up
Mobile money deposits hit Sh6.1 trillion in 2023, marking a 10 percent increase compared to Sh5.5 trillion deposited in 2022 as competition for new subscribers heats up among banks and fintechs.
This is according to data from the latest edition of the Economic Survey from the Kenya National Bureau of Statistics, (KNBS) that indicates a significant increase in mobile money transactions across the economy.
Mobile money transfers between subscribers increased by 18 percent from Sh4.6 trillion in 2022 to Sh5.4 trillion last year. The latest figures come on the back of increased competition between commercial lenders that have upgraded their digital offering, telcos, and fintechs looking to grab a slice of the lucrative mobile money business.
At the moment, Safaricom’s Fuliza ranks top among mobile lending products with Sh833 billion in disbursements last year, up from Sh700 billion in 2022. The overdraft facility launched in 2019 further recorded a 20 percent increase in the value of repayment, with the repayment vs disbursal rate hitting an industry high of 96 percent.
The runaway success of Fuliza has prompted commercial lenders to revamp their digital services offerings and develop innovative strategies to shore up some revenue.
KCB, NCBA Bank, and Absa Bank have signed partnerships with Safaricom in developing the KCB M-PESA, M-Shwari, and Timiza products respectively that are already delivering promising returns.
Data from the latest financial reports indicates that KCB M-PESA, M-Shwari, and Timiza reported an increase of 15.4 percent, 12.4 percent, and 49.4 percent in revenue last year from their respective lending products.
Last year, Absa Bank announced a 66 percent increase in the limit of money that customers can transact on their Timiza wallets from Sh150,000 to Sh250,000. The move came shortly after the bank expanded access to the Timiza wallet to include any Absa Bank ATM.
Read also: Absa Life Assurance Kenya earnings up 90% to Sh862 million
Access to insurance products
However, it is worth noting that Absa Bank’s Timiza transcends traditional lending by offering a suite of financial services. Beyond personal loans, Timiza provides users access to insurance products, such as personal accident covers of Sh100,000 and a last expense cover of Sh50,000, both available at a rate of Sh42 per month or Sh504 annually.
This integration of insurance within the app ensures that users can safeguard themselves and their families against unforeseen events with fairly minimal costs. Additionally, Timiza’s savings feature allows users to lock in their funds at a 9 percent interest rate, which accrues daily and is paid out quarterly, helping foster disciplined saving habits while enabling healthy returns.
Moreover, Timiza enhances the user experience by facilitating seamless payment options that support both Till Number and Paybill-based transactions. This functionality not only streamlines the process of paying bills and conducting business transactions but also promotes financial inclusion by making digital payments accessible to a broader audience.
Absa Bank recorded Sh22 billion in disbursements through Timiza, with the number of active customers increasing 32 percent in the period under review, attributable to its innovative approach of combining lending, insurance, savings, and payment services into a single platform.
The latest results come on the back of a strategic push by Absa Bank to digitize its retail business and evolve Timiza into a stand-alone financial business.
At the moment the bank records 92 percent of transactions outside the branch with 60 percent of back-office processes fully digitized.
