money has become an African phenomenon. The continent continues to lead the rest of the world in the adoption and usage of the payment technology. This progress is expected to attain a new leap according to WorldRemit, a global money transfer company. The UK-based money transfer firm has predicted that the amount of money that will sent to sub-Saharan Africa via mobile technology will reach $33 billion this year.
As Africa’s largest economy, Nigeria alone is projected to capture more than half of these funds while Kenya, South Africa and Uganda will also take significant chunks as they represent the continent’s largest money transfer market. WorldRemit reports that half of the 261 mobile money service providers across the globe are in sub-Saharan Africa.
Average mobile banking penetration across the continent hovers around 33 percent according to the African Development Bank (AfDB). But this is an aggregate figure that fails to capture the level of penetration in each sub-region. For instance, South Africa can boast of an 88 percent mobile banking penetration, though countries like Burundi trail behind at 7 percent. These figures are expected to increase as the necessary key drivers, including internet penetration and financial inclusion, continue to appreciate. Internet usage in the major mobile money markets, on the average, hover around 40 percent. Also, government intervention and regulation in the African financial services industry have increased the stability of financial institutions, which are now able to provide more financing packages to help telecommunication companies expand their coverage and quality of offerings.
Despite these achievements, a huge gap remains that could potential be exploited by mobile money. “There are currently two and a half billion unbanked people in the world,” says Alix Murphy, Senior Mobile Analyst at WorldRemit. “One billion of these people already have access to a mobile phone and so a potential means of accessing financial services.”
The case for further mobile money adoption across the continent is clearly presented in the compelling value proposition it offers Africa. Apart from its celebrated role in boosting financial inclusion across the region, Mobile Money also saves the continent some $2 billion spent on inefficient transfer solutions every year.
By Emmanuel Iruobe