The agents contracted by Safaricomearned 19.6 per cent more commissions compared to 2015 when they chalked up Sh12.2 billion.

The commissions earned by Safaricom M-Pesa agents are just about equivalent to what Co-operative Bank recorded as pretax profit last year, underling the increasing size of the business carried out by the agents.

Safaricom generated Sh41.5 billion in revenue from M-Pesa, with the agents taking 35 per cent of the earnings.

This however represents shrinking earnings from M-Pesa for the agents considering that it stood at 37.4 per cent in 2015 and 40 per cent a year earlier.

The ratio indicates Safaricom spends Sh35 out of every Sh100 the telco earns from M-Pesa to compensate its mobile money agents – offering a peek into the sales commission model for the mobile money transfer service.

“M-Pesa revenue grew by 27.2 per cent to Sh41.5 billion, driven by a 19.8 per cent growth in 30-day active M-Pesa customers to 16.6 million and a 17.5 per cent growth of our M-Pesa agent footprint to 100,744,” says the company in its annual report.

This means that each M-Pesa dealer earned an average commission of Sh12,147 per month last year compared to a monthly average of Sh11,937 in 2015 and Sh10,989 in 2014.

The growth in average monthly earnings shows concerns that increase in the number of agents was likely to dilute their earnings are unfounded.

“The large amount of agents in the market is limiting profitability per agent, and driving dis-satisfaction from agents,” Indian consultancy firm MicroSave had said in a research note released in 2014.

READ: M-Pesa agent commissions rise 25 per cent to Sh10.6bn

An increase in the number of subscribers and average size of transaction has driven the increase in agent earnings. In 2010 Safaricom had 17,653 agents who earned a monthly average of Sh35,668, fuelling the concerns.

Safaricom charges subscribers for use of M-Pesa based on the size of each transaction.

The telco also paid out Sh10.7 billion in airtime commission last year. Most M-Pesa agents are also distributors of airtime.

Airtime commissions paid out by the telco have gone flat following diversification of the distribution channels.

Safaricom paid Sh10.7 billion in airtime commission up from Sh10.6 billion a year earlier, less than a one per cent growth, while voice revenue rose by 3.8 per cent.