Traditional banks are feeling the heat: it is clear that “mobile money is not merely a financial innovation but a profoundly political technology reshaping governance across Africa”
According to Communications Authority (CA) data, Kenya reached 47.7 million active subscriptions – 91% market penetration – by the end of June 2025. This is is a big rise from a year earlier when the penetration rate was 77.3%, in June 2024.
The rise highlights mobile money’s dominance in financial services in the country as it has evolved from a simple payments mechanism to supporting a suite of services. It also has played a huge role in financial inclusion. Almost every adult in Kenya uses a mobile wallet for personal, household and businesses transactions, as well as for public services.
This growth has been enabled by the rapid expansion of telecom infrastructure, more people having smartphones, the rise of mobile broadband and demand for mobile money and banking services.
Pioneer Safaricom’s M-PESA still leads the market, but Airtel Money and Telkom’s T-Kash are also growing too. Increased competition means customers are enjoying lower transaction costs, better interoperability and a choice of more digital financial services. All of which, in turn, is driving growth. As the market nears saturation point, it will be interesting to see the next round of innovation to continue growth.
The CA also found that there were 76.7 million SIM subscriptions as of June 2025, a penetration rate of 146.3%, meaning many people have multiple SIMs, using different ones for different purposes.
Banks under pressure
Not surprisingly, the rise of mobile money and financial services is putting traditional banks under pressure, threatening to erode their share of deposits, payments and lending as the mobile services start to eat into their customer base rather than primarily being seen as for the formerly unbanked.
Regulators are in a tricky position as they don’t want to destabilise banks and they also need to keep a grip on issues like protecting consumers, preventing money laundering, imposing transaction limits and overseeing cross-border payments.
LSE’s view
A blog by Ziyad Chaouki on the London School of Economics website, published in June, summed up the situation:
“What’s clear is that mobile money is not merely a financial innovation but a profoundly political technology reshaping governance across Africa. Understanding these dynamics is essential not just for financial inclusion efforts but for anyone concerned with African political development in the digital age.
As states and citizens negotiate this new terrain, the question is not whether mobile money will transform African politics, but how different actors will adapt to and shape these transformations in the ongoing struggle for power, resources, and accountability.”
Chaouki is Executive President of 3DPolicy, a student-led think tank.
