M-PESA Kadogo: The Quiet Engine Behind Mass Adoption of Mobile Money in Kenya

M-PESA’s latest performance highlights a major reality of Kenya’s digital economy: the platform is no longer driven only by large transactions, but increasingly by high-frequency, low-value payments that happen every day across millions of users.

Beyond the remarkable growth in transaction volumes and value, one of M-PESA’s most momentous milestones in the last financial year was the continued growth of small-value transactions, known at Safaricom as M-PESA Kadogo.

Under the initiative, mobile money transfers of KES100 and below and merchant payments of KES200 and below are zero-rated. In the 2025/2026 financial year, whose results were announced on May 7, the initiative facilitated 17.1 billion free transactions, accounting for 58% of all M-PESA activity.

This dominance of free micro-payments reflects how mobile money has evolved into a mass-adoption platform where accessibility and convenience matter more than transaction value, especially in informal settlements, rural trading centres, and small-scale enterprises.

For millions of Kenyans, particularly low-income earners and small businesses, M-PESA Kadogo continues to break down financial barriers by enabling free small-value transactions, expanding access to digital financial services and strengthening participation in the formal digital economy.

The free transactions include person-to-person (P2P) transfers of between KES 1 and KES 100, Lipa na M-PESA payments below KES 200, cash deposits at M-PESA agent outlets and airtime purchases through M-PESA.

The decision to remove the charges was made in the wake of COVID-19, during which charges on bank-to-M-PESA and transfers below KES1,000 had been removed.

For the company, the effect of the removal of charges was a tripling in the number of transactions between 2020 and 2026.

Safaricom’s M-PESA platform processed 46.4 billion transactions worth KES 41.7 trillion during the last financial year, reinforcing its position as the backbone of Kenya’s digital economy while accelerating financial inclusion for millions across the country.

“With M-PESA Kadogo, our purpose is to make digital payments affordable for small-scale daily purchases and deepen financial inclusion. The removal of transaction fees has reduced friction and accelerated the usage of M-PESA across the country,” said Peter Ndegwa, CEO, Safaricom

The surge in Kadogo usage also underscores how mobile money platforms achieve scale in emerging markets—by embedding themselves into daily survival economics, where even the smallest payments matter.

The mobile financial services platform recorded a 13.4% growth in revenue to KES 182.7 billion, driven by strong double-digit growth across consumer payments, business payments and global payments.

Consumer payments remained the largest contributor to M-PESA revenue at KES 74.5 billion, followed by business payments at KES 56.7 billion, highlighting the platform’s evolution from a money transfer service into a broad digital payments and financial ecosystem.

One of the key highlights in the consumer business is the remarkable growth of Pochi la Biashara, which has expanded significantly over the past year. Since its launch in 2021, the product has continued to gain strong traction over the last two financial years. The customer base grew from 600,000 users in the 2024 financial year to 1.1 million the following year, before doubling to 2.2 million in the last financial year.

Revenue growth has been equally impressive, rising from KES 800 million in 2024 to KES 2.2 billion the following year, and reaching KES 4 billion in the last financial year.

Pochi la Biashara customers can also invest overnight balances in Ziidi MMF, enabling their money to grow.

The sustained growth of M-PESA reflects the increasing adoption of digital financial services and Safaricom’s continued commitment to advancing financial inclusion, digital access and economic empowerment across Kenya.