Technological and cultural trends have put Kenya at the forefront of the mobile money boom in Africa.
A recent report by the Central Bank of Kenya shows that mobile money transfer service providers moved close to 2 trillion Kenyan shillings (about $23 billion) via 733 million transactions last year alone. That was up from 579 million transactions worth 1.5 trillion shillings in 2012.
The Communications Commission of Kenya, the country's telecom sector regulator said recently that there are over 25 million mobile financial service subscribers in Kenya. Safaricom, Kenya's largest mobile operator and an early entrant in the mobile money market in Africa, has about 20 million of the country's mobile money users.
Kenya is the third largest telecom market in Africa after Nigeria and South Africa by investment and subscription.
But the report confirms that the East African country has become the largest mobile money market in the region.
Through mobile money services, Kenya is meeting a long-standing challenge for many African countries: providing financial services to the large population that does not have traditional bank accounts, the "unbanked."
The report attributes the boom in mobile money transfer platforms to the growth of a "digital transaction culture" together with a creative renaissance in Kenyan software development.
"Improved telecom infrastructure after liberalization, social dynamics and enabling regulatory environment also explains this rapid growth," the report said.
Most Africans do not have bank accounts and many have to travel long distances to access retail bank outlets. But increasingly, Africans are using mobile financial services to buy goods, pay utility bills and send and receive money.
Mobile operators and banks in the region are competing aggressively to provide mobile money services as the growth curve in the voice market has began to flatten.
In Zambia, mobile money accounts have already overtaken traditional bank accounts. Zambia's Central Bank, which gathers statistics about mobile money accounts, also said that the number of users of mobile money services is expected to increase significantly over the next three years. By December last year, statistics from Zambia's Central Bank showed that the country's mobile money accounts had reached 3.4 million compared to 2 million bank accounts.
"Plans are under way to partner with all the three mobile phone operators in the country to enhance financial inclusion through mobile money," said Central Bank Deputy Governor Tukiya Kankasa-Mabula .
And just last month, Zimbabwe joined the group of countries where more people use mobile money than have bank accounts.
As of the end of last year, only 14 percent of Zimbabwe's 13 million people, or approximately 1.8 million, have bank accounts, according to a study conducted by First Bank Corp. Securities of Zimbabwe. Meanwhile, mobile money accounts held by the country's two largest mobile phone operators have reached around 5 million.
The rise in the use of mobile money in the region has also been fuelled by the increasing availability and use of mobile phones, both in urban and rural areas, as operators try to capture customers in rural areas to increase their customer base and improve on their balance sheet.