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Kenya’s digital banking boom: A new era of financial inclusion

Ivy Mutali by Ivy Mutali
May 19, 2025
in Opinion
Reading Time: 2 mins read

Kenya’s digital banking landscape is undergoing a transformative shift, propelled by widespread mobile adoption, fintech innovation and evolving consumer preferences. As of September 2024, the country boasted 70.0 million active mobile subscriptions, translating to a penetration rate of 135.8%, with smartphones accounting for 72.6% of connected devices.

This digital surge has prompted traditional banks to reevaluate their operational strategies. In 2023, Kenyan banks closed 77 ATMs, reducing the total to 2,282, the lowest in five years. The shift is attributed to the high operational costs of ATMs and the growing preference for digital channels. Mobile banking usage surged from 52.0% in 2020 to nearly 68.0% by March 2024, while internet banking reached approximately 23.0%.

Fintech platforms like M-Pesa, Branch, and Tala have revolutionized financial services by offering instant loans, savings options and seamless transactions through mobile apps. These services have significantly contributed to financial inclusion, which reached 85.0% in 2024, up from 27.0% in 2006.

Mobile money remains a cornerstone of Kenya’s financial ecosystem. In 2024, mobile money agents facilitated transactions worth KES 8.7 trillion, equivalent to 53.0% of the country’s GDP. M-Pesa continues to dominate the market with a 92.3% share.

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The government’s support has been pivotal in this digital transformation. Policies like the removal of withdrawal codes for inter-network mobile money transfers have enhanced user convenience and boosted transaction volumes. Additionally, the Communications Authority of Kenya’s initiatives have fostered a conducive environment for digital growth.

As Kenya continues to embrace digital banking, the focus should remain on enhancing cybersecurity, expanding digital literacy and ensuring equitable access to technology. With these measures, Kenya is well-positioned to solidify its status as a leader in digital financial services in Africa.

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