Cash transacted by mobile money agents in Kenya jumped 36 percent to $54.3 billion in the nine months to November 2021.

Data from the Central Bank of Kenya (CBK) shows that transactions through agents rose from $40.1 billion in a similar period a year earlier, indicating growing use during the pandemic.

Mobile money agency business has been booming especially as banks seek alternatives for brick and motor channels to reach their customers.

Kenyans have increased their reliance on mobile money agents for transactions, from an annual $17.52 billion six years ago to the current rate.

Between 2016 and 2019, Kenyans transacted about Ksh3 trillion ($265 billion), as transactions grew modestly.

However, since 2020, transactions grew 16 percent following the start of the Covid-19 pandemic that shifted more customers to mobile money, boosting agency businesses that support the sector.

CBK introduced some relief on mobile phone payments that were in place from March 2020, allowing free mobile money transactions of up to Ksh1,000 ($8.8) from banks to mobile wallets.

This was aimed at encouraging cashless payments on mobile phones as part of efforts to contain the spread of the coronavirus.

The growth also indicates the impact of eased restrictions with the reopening of learning institutions and resuming business activities, which push up the demand for goods and services.

The pandemic slowed economic activities, which in turn led to layoffs and reduced incomes, resulting in declined spending and investment.

Kenya’s economic growth dropped to negative 0.3 percent in 2020 from five percent in 2019. This was the first annual GDP contraction since 1992, when the output fell to 0.8 percent.

Recovery has started with a GDP rebound of 10.1 percent in the second quarter, and 9.9 per cent in the third quarter of last year. The CBK is expecting the economy have grown by 6.1 percent in 2021, and by 5.6 percent this year.

Despite the rise in transactions, the number of mobile money agents fell by 10,726 last October, a 3.5 percent drop, and the first decline since June 2020.

Central Bank of Kenya (CBK) data shows that there were 295,105 mobile money agents in October, down from 305,831 in September.

Mobile money agents have been increasing over the years with a slight decline in June when it dropped marginally by 5,481.

The mobile money agency business has been booming, especially as banks seek alternatives for brick-and-motor channels to reach their customers.

The latest data from the CBK shows agent transactions in the period rose by 38.3 percent or Ksh1.5 trillion ($13.64 million) to Ksh5.64 ($51.23 million) trillion from Ksh4.08 trillion ($37.1 million) in 2020.

The growth 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.

The pandemic last year had slowed down economic activities, which in turn led to layoffs and reduced incomes, resulting in declined spending and investment.

Growth slid to negative 0.3 percent last year from 5.0 percent in 2019. This was the first annual gross domestic product contraction since 1992 when the output slid 0.8 percent.

The recovery has, however, started with the Central Bank expecting the economy to grow by 6.1 percent this year and 5.6 percent in 2022.