Kenya's mobile money transfers hit KSh3.35trn

In Kenya, the mobile money industry has witnessed a remarkable surge, with transfers reaching a staggering KSh3.35 trillion in 2016. This increase has been attributed to the rising number of mobile lending services in the country. On another front, the struggling retail giant Uchumi has marked a significant milestone with a 46% decrease in its half-year losses. To stabilize its performance, the company has resorted to selling off non-core assets. Market analyst Mbithe Muema sheds light on these developments. The surge in mobile money transfers has marked a 19% year-on-year growth, signifying a significant shift in the banking sector. The introduction of mobile lending has compelled traditional banks to adopt more efficient strategies to cut costs and improve services. Furthermore, leveraging mobile platforms for credit ratings and extending credit to clients has become paramount for banks. This platform not only enhances credit facilities but also propels financial inclusion by reaching out to underserved areas like rural regions. The government's move to implement interest rate caps was aimed at deepening financial inclusion and spurring economic growth. By encouraging banks to extend credit beyond major cities like Nairobi and Mombasa, the policy seeks to channel investments into SMEs and micro-SMEs. While digital payments have gained momentum, traditional banking services are not expected to be entirely replaced. Instead, mobile technologies will complement traditional services, fostering efficiency and widening the scope of financial services. Shifting focus to Uchumi, the company has made notable strides in reducing its half-year losses by 46%. Despite this improvement, concerns loom over the lack of significant growth in the company's top line. Uchumi's cost-cutting measures have been commendable, accompanied by the inclusion of new suppliers and products. However, the challenge lies in attracting customers with a diverse range of products and maintaining a consistent supply chain. The need for sustainable growth and customer retention remains pivotal for Uchumi's resurgence. Looking ahead, Uchumi must transition from cost reduction to revenue generation to ensure long-term sustainability. The market eagerly awaits the company's strategic initiatives to enhance its top line performance and regain consumer confidence. The shift towards restocking shelves with a diverse array of products and fostering strong supplier relationships will be crucial in Uchumi's journey towards recovery. In conclusion, the surge in mobile money transfers and Uchumi's turnaround efforts signify a dynamic shift in Kenya's financial and retail landscape. The convergence of digital innovations and traditional banking models heralds a new era of financial inclusivity and operational efficiency. As Kenya navigates these transformative changes, the market anticipates sustained growth and resilience in both the mobile money and retail sectors.