M-Pesa Records First-Ever Agent Decline

Safaricom's pioneering mobile money service, M-Pesa, has recorded its first-ever decline in agent numbers following the implementation of a new geo-locking security measure.

The policy, designed to combat fraud, restricts agents to operating their tills within specific geographical boundaries, automatically deactivating services when agents move outside their designated zones. The impact of this policy has been significant, with Safaricom's latest report revealing a reduction of 8,344 agents in the year ending March 2024. The total number of active agents fell to 262,016, marking a three percent decrease from the previous year's 270,360. This decline represents a notable shift for M-Pesa, which has historically served as a crucial income source for many Kenyans.

“We experienced a decline in active agent numbers [in the 2024 financial year] due to the introduction of geo-locking for tills,” Safaricom said in a new report.

Despite the concerning drop in agent numbers, Safaricom maintains that the geo-locking policy serves a vital security function. The company reported a substantial increase in investigated fraud cases, which more than tripled from 33 to 103 year-over-year, partly due to the inclusion of data from its Ethiopian operations. Notably, cases of asset misappropriation, including till theft, have been eliminated entirely. From a regulatory perspective, the geo-locking initiative has yielded positive results, enhancing compliance and providing valuable insights into market coverage based on active till locations.

Interestingly, while M-Pesa experienced an agent exodus, the broader mobile money sector in Kenya remained relatively stable, with a net decrease of only 873 agents across all providers. This suggests that competitors such as Airtel Money and T-Kash have actually expanded their agent networks during this period. The resilience of Kenya's mobile money industry is further evidenced by growth in key metrics, including the number of subscriptions, transaction volumes, and total transaction values. This continued expansion indicates that while M-Pesa may have lost some agents, the underlying demand for mobile money services continues to strengthen.