Money Markets
CBK governor Njuguna Ndung’u. The governor says rapid growth of mobile
money transactions has compelled Central Bank of Kenya to adopt sector
statistics as a key monetary policy indicator, PHOTO | FILE |
NATION MEDIA GROUP
By CHARLES MWANIKI, cmwaniki@ke.nationmedia.com
In Summary
- Among the key economic indicators are inflation, the exchange rate, credit supply, food cost, agriculture production and prices as well as capital market’s performance.
- Adoption of mobile money service across the financial sector has matured with banks using it to reach previously unbanked customers and take services beyond the banking halls.
The rapid growth of mobile money transactions has
compelled Central Bank of Kenya (CBK) to adopt sector statistics as a
key monetary policy indicator, Governor Njuguna Ndung’u said Thursday.
He said the growth of total transactions to equal 31 per
cent of the GDP means the monetary policy committee now considers mobile
transactions alongside other traditional indicators to determine where
economic activity lies in the country.
Speaking at the Kenya Bankers Association (KBA)
annual research conference, the governor said mobile money transaction
statistics have improved the ability of the monetary regulators to
identify boom and bust cycles within the economy.
Among the key economic indicators are inflation,
the exchange rate, credit supply, food cost, agriculture production and
prices as well as capital market’s performance.
“We also look at various other indicators such as
tourist arrivals and the purpose of visit, cement production and the
construction trends, electricity consumption and VAT data from KRA,”
said Prof Ndung’u.
“But now mobile phone financial transactions have
also become a new indicator, comprising a significant percentage when
considered against GDP, which means that you can actually compute GDP by
looking at transactions value.”
Using all these indicators, the monetary policy
committee is able to better analyse the real economy thus helping in
preparation for any economic shocks.
A CBK report released late July showed the value of
mobile payments grew by nearly a third to Sh1.19 trillion in the first
six months of the year compared to Sh872.1 billion last year.
On a monthly basis users moved an average of
Sh186.4 billion – or Sh6.2 billion per day, compared to the Sh4.8
billion a day moved in a similar period last year.
The CBK data also showed the value of mobile money
transactions more than tripled in the past five years to reach the
Sh1.19 trillion compared to the Sh322.5 billion that was moved in the
first six months of 2010.
Kenya had a total of 25.9 million mobile money
subscribers at the end of June, having risen from 23.75 million in June
2013, a growth of 9.2 per cent.
Adoption of mobile money service across the
financial sector has matured with banks using it to reach previously
unbanked customers and take services beyond the banking halls.
Various payments platforms have also been introduced by the industry such as Safaricom
Lipa na M-Pesa launched in June last year that has so far enlisted over
122,000 outlets including hotels, retailers, airlines, public service
vehicles and oil marketers.
Other payment platforms include FEP’s Lipa Sasa Na
MobiKash, Airtel Money and Tangaza Pesa’s online shopping platform
MyDuka which is currently being piloted.
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