Rural mobile money agents more profitable

Mobile money transfer businesses based in the rural Kenya are turning out to be more profitable compared to those based in urban areas, a new survey by Helix Institute of Digital Finance has revealed.The research indicates that in non-Nairobi urban areas, agents’ profit have increased by 26 per cent, compared to 45 per cent in rural areas.The agents attributed the higher profits to lower operating costs and introduction of new revenue streams.The report indicates that profits in Nairobi have decreased by 20 percent in the period under review attributable to competition from the new agents setting up business in the capital.Agents in urban areas outside Nairobi, including Nakuru, Kisumu, Mombasa and Eldoret, are enjoying the highest profits (Sh8,606), followed by those in rural areas (Sh7,530) and Nairobi at Sh6,454.“Overall, profitability has increased by 10 per cent from 2013, including a 26 per cent increase in non-Nairobi urban areas and a 45 per cent increase in rural areas. Non-Nairobi urban areas are now the most profitable location,” read the report.The survey showed only 11 per cent of mobile money agents were not profitable, down from 17 per cent last year while 80 per cent were willing to continue conducting the agency business into next year.READ: Bank agents’ pay matches mobile rivals despite fewer dealsSafaricom is still the largest provider in Kenya, but has experienced a substantial drop in its market presence from 90 per cent in 2013 to 79 per cent in 2014, including a 19 percent drop in Nairobi.The drop is attributed to the entry of mobile banking agents with Equity leading the commercial banks in terms of market presence both in Nairobi and rural area.The report defines market presence as cash transacted by the agents—cash in and cash out. M-Pesa and Airtel money agents conducts an average of 46 transaction daily with a maidenSafaricom has a presence of 84 per cent in the rural area and 70 per cent in Nairobi. It followed by Equity that has 11 per cent in Nairobi and 6 per cent in rural Kenya. Airtel has 5 per cent both in Nairobi and Rural Kenya.“While overall transaction figures stay relatively similar to 2013, agents in Nairobi continue to conduct the lowest number of median transactions, and there was a 10 per cent decrease in daily transactions in rural areas,” the report noted.

Date: 
Wednesday, June 3, 2015 - 09:15