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Wow! Mobile Money Transactions Are Now Larger Than Kenya’s GDP

By Wayan Vota on May 16, 2018

mobile money vs gdp kenya

For years, we’ve heard how the value of M-PESA mobile money transactions are a rising percentage of Kenya’s Gross Domestic Product. In 2010 we reported M-PESA was 20% of Kenya’s GDP, a massive achievement for Safaricom back then.

M-PESA has only grown larger and more prominent, and now there are five different mobile money providers in Kenya, all going strong. How large is their collective mobile money transaction volume?

Today, we predict that Kenya has passed a new global milestone.

Mobile Money Transaction Value Has Surpassed Kenya’s GDP

Using quarterly statistics from the Communications Authority of Kenya, we built a table for mobile money transactions from all the different providers through December 2017, including M-PESA, Airtel Money, Orange Money, Equitel Money, Mobikash, and Mobile Pay.

The value of these transactions (in Kenyan Shillings) is stunning all by themselves.

Kenya Mobile Money Transaction Value

Then, using simple arithmetic growth rates – Kenya’s GDP is growing at 5% per year, however, its mobile money transaction value is growing at 5% per quarter – we predicted both Kenya’s GDP and the mobile money transaction value for each provider over the next two quarters. You can see our math here.

The net result is that sometime in April-June 2018, the total value of Kenya’s mobile money transactions should surpass its GDP.

We will not have official numbers for another 3-6 months, as the Communications Authority of Kenya doesn’t release figures in real time, and their reporting quarters are different than calendar quarters, but the milestone is as good as passed.

Congratulations to Kenya – a world leader in digital financial services – on breaking yet another mobile money record!

Is More Mobile Money a Good Thing?

Since we started hearing about mobile money, there is continued worry about its impact on Kenyan business growth overall, and on the banking sector specifically.

Regulators worry about its impact on Kenya’s economy if anything went wrong, but what is happening at the local level? Key for us at IntraHealth International and in digital development in general, is the impact of mobile money transactions on rural populations, and particularity rural women,

Mobile Money Can Lift Women Out of Poverty

In a recent Science journal article, researchers have caused waves with the finding that access and use of M-PESA has lifted an astounding 2% of households out of poverty.

The gender link here is that households led by women experienced the most profound effects of this phenomenon – propelled by their new-found ability to exhibit more financial resilience and to save money by using the service. Moreover, mobile money also appeared to help women move out of agricultural employment and into entrepreneurial or retail employment pursuits.

The catalysts for these changes, according to the study authors, is that women have appropriated M-PESA in ways which help them enhance the efficiency of how much time they spend working and how much money they save.

Now with mobile money transaction value exceeding Kenya’s GDP, we should see this effect magnified for more rural women, and the country’s population as a whole.

Filed Under: Economic Development, Featured
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Written by
Wayan Vota co-founded ICTworks and is the Digital Health Director at IntraHealth International. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of IntraHealth International or other ICTWorks sponsors.
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One Comment to “Wow! Mobile Money Transactions Are Now Larger Than Kenya’s GDP”

  1. Mohamed says:

    Positive outcome from mobile money and ICT innovation. For this to translate into real gain for the bottom 5 or 10 % of the population, their gain must be twice or more than the top 5 or 10%, else we r kidding ourselves in getting exited about nothing or at best a marginal gain. I am sorry to dampen your enthusiasm re Kenya GDP being overtaken by mpesa transaction value… but what does it really mean for the poor farmer! As long as the seller of the seeds he needs to grow the next season’s crops makes a 120% more… and charges him more than he gained from his mess transactions….

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