Kenya’s mobile networks are now collectively the largest bank in the country, thanks to the mobile money deposits they hold on behalf of their subscribers.
According to the telecoms regulator, the CCK, the mobile networks held Sh226 billion (US$2.65 billion) in deposits at the end of last year — compared to the country’s largest commercial bank, which held deposits of Sh223 billion.
“The mobile money transfer service continued to record tremendous growth during the period. The number of mobile money transfer subscribers grew by 9.4 per cent to 21.1 million up from 19.3 million recorded in the previous period,” the CCK said in a report. Coupled with well over 63,000 agents, the M-pesa network far outweighs any bank branch network in sub-Saharan Africa.
In Zimbabwe, Ecocash’s growth, second only to Mpesa has seen them acquire 2.1 million customers. Compare this with banking sector account holders estimated at only 1.5million, the banks are struggling not just for share of customer wallet, but share of customer period.
Banks and financial institutions launching mobile wallets in the immediate future should expect to enter a hotly contested market, crowded with own-brand solutions that are limited to the delivery of proprietary services only, according to Mobey Forum’s Business Workgroup. This means that banks and financial institutions should think very carefully about their chosen structure and approach to market. Decisions taken now will have a significant bearing on the value they are able to deliver to customers and, in a crowded market, value will be the key to earning the loyalty of end-users.”