Use of mobile money has led to the growth of financial inclusion according to the World Bank‘s Global Findex database of 2017.
World Bank in a press release says while the share of adults with a financial institution account remained flat, the share with a mobile money account almost doubled, to 21 percent in the Sub-Saharan region.
“Since 2014, mobile money accounts have spread from East Africa to West Africa and beyond,” says the World Bank.
“The region is home to all eight economies where 20 percent or more of adults use only a mobile money account: Burkina Faso, Côte d’Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe.”
International Finance Corporation (IFC) Head in the Financial Institutions Group Advisory for Sub- Saharan Africa, Riadh Naouar who agrees that the use of mobile money and agent banking are increasing financial inclusion says that the future of the financial sector on the African continent is digital in a report titled: Digital Access: The Future of Financial Inclusion in Africa.
“By and large, the growth in traditional financial institution accounts lag behind,” says Naouar. “Where they do increase, it often appears to be on the back of the mobile money revolution.”
“The message is clear: the future of the financial sector on the continent is digital.”
“Banks in the sub-region are increasingly forming partnerships with mobile money operators to offer accessible and affordable services beyond the historical target market, and are investing in their own digital operations to build new ways of banking,” Naouar says.
In Zimbabwe mobile money have been increasing in use as the country is facing cash challenges.
Mobile money accounted for 754 million of the 1 billion transctions conducted in Zimbabwe last year.
“Mobile money has become a popular and convenient method of paying for goods and services amidst cash shortages. The introduction of bank to mobile wallet transfers has also contributed to the growth in mobile money transactions,” states the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) in a report.
Globally, 69 percent of adults (3.8 billion people) have an account at a bank or mobile money provider, a crucial step in escaping poverty according the World Bank.
The growing use of mobile money opens opportunities of increasing account ownership according to the World Bank.
“Opportunities abound to increase account ownership: up to 95 million unbanked adults in the region receive cash payments for agricultural products, and roughly 65 million save using semiformal methods,” says the World Bank.
