Enabling Mobile Money Policies in Kenya: Fostering a Digital Finance Revolution

This paper discusses the mobile money landscape in Kenya and shares lessons from the country’s mobile money experience that can be used by regulators, policymakers, and mobile network operators. It states that in Kenya, broad access to financial services has been made possible by mobile network operators that are leveraging their technology, ubiquitous distribution networks, and partnerships with banks to deliver mobile financial services to the unbanked and underserved population. The paper suggests that dependency on riskier and less efficient methods of conducting monetary transactions has considerably reduced because of the rapid growth of the mobile money ecosystem in the country. Some of key highlights of the study include:

• Regulators can be agents of change for financial inclusion;
• Mobile money is a catalyst for financial inclusion and the development of the digital ecosystem;
• Mobile money does not introduce systemic risk to the financial system;
• Early and sustained engagement with the regulator is good for business;
• Adapting to a dynamic regulatory environment is essential and development of a mobile money ecosystem creates many opportunities;
• Even though the mobile money ecosystem has grown rapidly in Kenya, there exist certain issues such as taxations of mobile money, deposit insurance, and managing accrued interests.