Africa Still Leads the World In Mobile Money But Growth Is Shifting East To West 4

Sub-Saharan Africa is leading the world in adopting mobile money. ‘The State of Mobile Money in Sub-Saharan Africa’ report published by the GSM Association (GSMA) shows that the spurt in growth in this mode of payment in the region has primarily been responsible for broader global growth in this segment.

The graph above shows that the number of available mobile money schemes had stood at 140 across 39 countries in Sub-Saharan Africa at the end of 2016 – over half of the deployments existing globally.

By the end of last year, there were 277 million registered mobile money accounts across sub-Saharan Africa, in addition to the 1.5 million registered agents.

West Africa getting in on the action

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The report noted that in Gabon, Ghana, Kenya, Namibia, Tanzania, Uganda and Zimbabwe, over 40% of adults use mobile money. Three of these countries – Kenya, Tanzania, and Uganda – are from East Africa, with this sub-region leading the continent in terms of the volume of transactions. But as seen from the graph below, West Africa is now witnessing rapid growth in the category.

Giving rise to opportunities: The example of Kenya

The high inclination towards mobile money platforms has been crucial in providing an alternate channel for banking, insurance, and credit products in a continent where a large section of the population is unbanked.

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Kenya has been a trendsetter in expanding the scope of mobile money platforms.

The country was the pioneer in mobile payments when it introduced M-Pesa in 2007. Since then, its citizens have been using the service extensively. Given its early momentum, Kenya has not been shy about innovation.

Safaricom – the provider of M-Pesa – had launched M-Shwari in 2012 – a suite of banking products for the its customers.

According to the GSMA report, Kenyans borrowed 150 billion shillings ($1.4 billion) in total through mobile phone platforms in 2016, resulting in big business for telecom operators. M-Shwari witnessed transactions amounting to 100 billion shillings ($962 million).

In the past five years, subscribers for mobile banking have surged from less than a million to 15 million.

Tanzania follows Kenya in the mobile banking segment, with transactions worth 2.5 billion shillings $24 million) seen in 2016.

Apart from savings, insurance, and credit products via mobile phones, Kenya has also issued government bonds over these platforms with much success.

The graph above shows the opportunities that mobile money is creating for sub-Saharan Africa. This platform has led to a lot of innovation and has gotten the attention of major global payment systems players. We look at this more closely in the next article.

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