Quote from Lawyer on July 3, 2025, 7:00 am

In Kenya, M-Pesa, a mobile money service launched by Safaricom in 2007, has revolutionized financial inclusion, enabling millions to store, transfer, and manage money through their mobile phones. With over 51 million users across seven African countries and transactions worth nearly half of Kenya’s GDP, M-Pesa has become a cornerstone of daily financial transactions. However, a critical question arises when an account holder passes away: what happens to the funds in their M-Pesa account? As digital finance grows, understanding how digital assets like M-Pesa balances are handled under Kenyan law is increasingly important. This article explores the legal and procedural framework for managing a deceased person’s M-Pesa account, highlighting the steps, challenges, and significance of proper estate planning in the era of digital finance.

The Importance of M-Pesa in Kenya’s Financial Landscape

M-Pesa, meaning "mobile money" in Swahili, is more than just a payment platform; for many Kenyans, it serves as a de facto bank account. By 2016, over 75% of Kenyans had access to formal financial services, up from 26.7% in 2006, largely due to M-Pesa’s widespread adoption. The platform supports a range of transactions, from peer-to-peer transfers to bill payments, merchant transactions, and even micro-loans through services like Fuliza and M-Shwari. As of the end of 2024, unclaimed M-Pesa deposits reached Ksh3.2 billion, representing 96.3% of dormant mobile money accounts in Kenya, often tied to deceased account holders or inactive SIM cards. This significant figure underscores the need to address how these digital assets are managed after death.

Legal Framework Governing M-Pesa Accounts After Death

In Kenya, the handling of a deceased person’s M-Pesa account is governed by the Law of Succession Act (Cap 160) and the Unclaimed Financial Assets Act (No. 40 of 2011). These laws outline the procedures for accessing and distributing a deceased person’s assets, including digital assets like mobile money balances. Unlike traditional bank accounts, M-Pesa accounts are tied to a mobile phone number and SIM card, which adds complexity to the succession process. Safaricom, the primary operator of M-Pesa, has established specific protocols to ensure funds are transferred to rightful beneficiaries while complying with Kenyan law.

Key Legal Principles

1. No Automatic Transfer: Upon the account holder’s death, the funds in their M-Pesa account do not automatically transfer to family members or next of kin. A formal legal process must be followed to access the balance.

2. Account Freezing: Once Safaricom is notified of the account holder’s death, the M-Pesa account is frozen to prevent unauthorized transactions and protect the deceased’s estate.

3. Two-Year Dormancy Rule: If no claim is made within two years, the funds are deemed dormant and transferred to the Unclaimed Financial Assets Authority (UFAA), as mandated by law. After this transfer, claimants must deal directly with the UFAA, not Safaricom.

4. Loan Treatment: Outstanding loans, such as those from Fuliza or M-Shwari, are not inherited or transferred to beneficiaries. These loans reach "end-of-life" upon the account holder’s death and are written off by Safaricom.

Steps to Claim M-Pesa Funds After Death

The process of claiming funds from a deceased person’s M-Pesa account varies depending on the amount in the account. Safaricom categorizes claims into three tiers based on the balance, each with specific documentation requirements. Below is a step-by-step guide to the process:

Step 1: Notify Safaricom

The first step is for the next of kin or a family member to inform Safaricom of the account holder’s death. This can be done by visiting a Safaricom retail shop or customer care center and submitting a formal written request. The request should include:

• The claimant’s name and contact details.

• The claimant’s relationship to the deceased.

• A clear statement of intent to claim the M-Pesa balance.

Safaricom will then freeze the account to prevent further transactions and begin the verification process.

Step 2: Provide Required Documentation

The documentation required depends on the amount in the M-Pesa account. Safaricom has outlined three tiers:

Tier 1: Balances Between Ksh1 and Ksh30,000

For smaller balances, the process is relatively straightforward. Required documents include:

• Original Death Certificate: To confirm the account holder’s passing (a burial permit is not acceptable).

• Claimant’s Identification: A valid National ID, Alien ID, Passport, or Military ID.

• One of the Following:

  • A letter from a local administrator (e.g., chief, assistant chief, county commissioner, or deputy county commissioner) confirming the claimant’s relationship to the deceased.

  • An affidavit sworn before a Commissioner of Oaths, stating the claimant’s relationship to the deceased.

  • A Grant of Probate (if a will exists) or Letters of Administration (if no will exists).

Tier 2: Balances Between Ksh30,001 and Ksh200,000

For mid-range balances, additional legal documentation is required:

• Original Death Certificate.

• Claimant’s Identification (as above).

• Safaricom Next of Kin Claims Form: Available for download from Safaricom’s website or at retail centers.

• One of the Following:

  • A Statutory Declaration (affidavit) sworn before a Commissioner of Oaths.

  • A Letter from the Provincial Administration (e.g., chief or commissioner).

  • A Confirmed Grant of Probate or Letters of Administration.

Tier 3: Balances Above Ksh200,000

For larger balances, the process is more rigorous due to the significant value of the assets:

• Original Death Certificate.

• Claimant’s Identification.

• Safaricom Next of Kin Claims Form.

• Confirmed Grant of Probate (if a will exists) or Confirmed Letters of Administration (if no will exists), issued by the High Court.

• Statutory Declaration (Affidavit): Detailing the claimant’s relationship to the deceased.

• In cases of disputes among heirs, a Certificate of Confirmation of Grant from the High Court may also be required.

Step 3: Submit Documents and Await Processing

The claimant must present all documents in person at a Safaricom retail center. Safaricom verifies the documents to ensure compliance with legal requirements. If everything is in order, the funds are transferred to the claimant’s registered M-Pesa account within 24 hours, as per Safaricom’s Service Level Agreement (SLA). Note that Safaricom only disburses funds to an M-Pesa account, not through other payment platforms.

Step 4: Claiming Funds from UFAA (If Applicable)

If the funds have already been transferred to the UFAA after two years of dormancy, the claimant must follow the UFAA’s process, which includes:

• Completed Beneficiary Claim Form (Form 4B): Duly commissioned by a lawyer.

• Completed Indemnity Agreement (Form 5): Also commissioned by a lawyer.

• Original Official Letter: Confirming the remittance of unclaimed financial assets from Safaricom to UFAA.

• Certified Copy of Claimant’s ID: National ID, Passport, or equivalent.

• Certificate of Confirmation of Grant: Issued by the High Court or a Certificate of Summary Administration from the Public Trustee or Deputy County Commissioner.

Challenges in Claiming M-Pesa Funds

Despite the structured process, several challenges can complicate claims:

1. Lack of Awareness: Many Kenyans are unaware of the legal steps required to claim M-Pesa funds, leading to significant unclaimed balances (Ksh3.2 billion as of 2024).

2. Complex Legal Processes: Obtaining a Grant of Probate or Letters of Administration can take months or even years, especially if there are disputes among heirs or if the deceased left no will.

3. Poor Record-Keeping: Account holders often fail to update next-of-kin details or maintain proper documentation, making it difficult for heirs to locate or claim funds.

4. Financial Literacy Gaps: Limited understanding of inheritance laws and mobile money operations contributes to unclaimed assets.

5. Disputes Among Heirs: Family disagreements over who is entitled to the funds can delay or derail the process, requiring court intervention.

The Role of Next of Kin Registration

To streamline the process, Safaricom encourages users to register a next of kin for their M-Pesa account. This can be done by:

1. Dialing *234# on the registered M-Pesa line.

2. Selecting Option 2: My M-PESA Information.

3. Choosing Option 6: Next of Kin.

4. Entering the Bonga PIN and providing the next of kin’s details (mobile number and ID).

Registering a next of kin ensures that funds can be transferred smoothly to the designated beneficiary, reducing the likelihood of disputes or unclaimed assets. This simple, free step can save families significant time and effort.

Broader Implications for Digital Finance

The issue of unclaimed M-Pesa funds highlights broader challenges in digital finance and estate planning. As mobile money platforms like M-Pesa become integral to financial systems, they raise new questions about how digital assets are treated in succession. Unlike traditional assets like land or bank accounts, digital assets are intangible and tied to technology, which can complicate access. The Ksh3.2 billion in unclaimed M-Pesa funds is a wake-up call for stakeholders to address gaps in financial literacy, simplify legal processes, and enhance public awareness.

Safaricom has taken steps to mitigate these issues, including public awareness campaigns and collaborations with the UFAA. However, more needs to be done to:

• Enhance Financial Literacy: Educate Kenyans on the importance of estate planning and next-of-kin registration.

• Simplify Claims Processes: Streamline legal requirements for smaller balances to reduce barriers.

• Promote Digital Estate Planning: Encourage users to document their digital assets, including mobile money accounts, in their wills.

Conclusion

The management of M-Pesa accounts after death in Kenya is a critical aspect of digital finance that intersects with succession law. While Safaricom has established a clear process for claiming funds, the complexity of legal requirements and lack of awareness can leave billions of shillings unclaimed. By registering a next of kin, maintaining proper documentation, and understanding the legal steps involved, families can ensure that these digital assets are transferred to rightful beneficiaries. As digital finance continues to grow, addressing these challenges will be essential to maintaining trust in mobile money platforms and ensuring financial inclusivity.

For assistance with claiming M-Pesa funds or navigating succession laws, contact us at +254 716 808 104 or info@lawguide.co.ke for expert legal guidance.