Mobile Money Account Growth and Transaction Volume in Kenya, 2007-2023 | RISE Research

This paper investigates whether growth in registered mobile money accounts is proportionally linked to growth in transaction volume and value for M-PESA in Kenya, using 198 monthly observations from the Central Bank of Kenya spanning 2007 to 2023. Using OLS regression across four model specifications, including models with a time trend and month fixed effects, the study finds that a 1% increase in registered accounts is associated with a 0.755% increase in transaction volume and a 0.791% increase in transaction value, an elasticity below one indicating the relationship, while positive and statistically significant at the 1% level, is less than proportional. Critically, the number of physical agents (the human intermediaries, such as shopkeepers, who facilitate cash deposits and withdrawals) emerges as an independent driver of activity, with a 1% increase in agents associated with 0.433% and 0.320% increases in transaction volume and value respectively, even after controlling for registered accounts. A negative and significant time-trend coefficient further suggests that more recently registered users are, on average, less active than earlier adopters. Bootstrap resampling (1,000 iterations) confirmed the stability of the accounts elasticity estimate, with a 95% confidence interval of roughly 0.64 to 0.89, while Monte Carlo forecasting projected that transaction value will continue rising through 2033. The paper concludes that registered account growth alone does not guarantee proportional increases in transaction activity, and that agent-network accessibility plays a distinct and independent role in driving usage. This suggests that policymakers seeking to strengthen financial inclusion in Kenya and similar markets should focus on expanding agent accessibility and encouraging active usage, rather than treating account registration numbers alone as a sufficient proxy for financial inclusion.