Most Kenyans still use cash to transact: Survey

Tuesday February 23 2016

Despite the 87 per cent mobile penetration in

Despite the 87 per cent mobile penetration in Kenya and the widely acclaimed use of M-Pesa across major sectors of the economy. PHOTO | FILE 

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Despite the 87 per cent mobile penetration in Kenya and the widely acclaimed use of M-Pesa across major sectors of the economy, cash is still the main means of transactions, according to the latest survey.

Kenya which ranks third after Mauritius and South Africa in Africa in financial access, has most of its key business sectors dominated by cash transactions.

The 2016 Finacces household survey conducted by Financial Sector Deepening (FSD) however shows that most of those in salaried employment receive substantial payments digitally.

Head of DFID- Kenya, Ms Lisa Phillips said Kenya has more to do to speed up the drive towards cash lite after recording progress in financial inclusion.

“The UK through DFID has been on the lead in ensuring that financial systems also work for low income populations. The progress that Kenya is making on financial inclusion is indeed very significant to the lives of ordinary Kenyan households and businesses but more still needs to be done to address the gaps identified in the report” Ms Philips said.

Business people made 95 per cent of their transactions in cash while a similar percentage of casual labourers received payments in cash, the Finaccess survey shows.

Agriculture which comprises over 30 per cent of household incomes nationally had 93 per cent of transactions done in cash in the period under review, while 73.3 per cent of dependants still got financial assistance via the same means.

The report said although banks remain popular as financial service providers, nearly twice as many Kenyans used mobile financial services compared to the financial institutions.


Banks are still reliant on mobile banking to sustain both growth and usage, according to the report released last week.

FSD said the rapid uptake of mobile money accounts witnessed three years ago has also begun to plateau.

“Meanwhile, with 18 per cent of the population using new mobile banking services such as M-Shwari and KCB M-Pesa, the proportion of bank account users has now risen to 38 per cent  a 10 per cent  increase since 2013,” noted the report.

Many Kenyans use mobile financial services, mobile banking and informal channels on a daily and weekly basis. Banks, MFIs and Saccos are mostly used once a month.

Mobile bank accounts have been comparatively more popular among young, urban males aged 18-25 years, attaining parity with the uptake of traditional bank accounts. As the population gets older, the report says, the gap between usage of traditional and mobile bank accounts widens, with the former being more popular.

Patterns of uptake of mobile bank accounts for men and women closely mirror uptake of traditional bank accounts, with two thirds of women using these new solutions compared to men.

There is, however, a significant difference between rural and urban population, with more than twice as many urban dwellers using mobile bank accounts as rural users.

The banks were said to have experienced higher levels of closure/dormancy than other services such as mobile money accounts, with those abandoning bank accounts citing loss of income source. This underlines the fact that many simply use bank accounts to receive salaries and other livelihood-related payments.

While the dominant use of mobile financial services is still for interpersonal transfers, 42 per cent of consumers use these services to make livelihood payments, interact with their financial institutions and pay for goods and services.