In a far-flung African village, when an 80-year-old grandmother wants to send and receive cash, she simply registers for mobile money with a service provider.
If she wants to pay for services or transfer money to someone in another village, she goes to an agent and pays the desired amount, which is loaded onto her "account". The recipient can then withdraw the money from an agent in their village.
Mobile Money today represents a fundamentally transformational opportunity to connect billions of people to the formal and informal economy, the unbanked and banked citizens of the world.
According to GSMA’s Mobile Economy 2013 report, globally, more than 2.5 billion adults do not have access to a formal bank account and are not able to access basic financial services in order to save, borrow or transact.
However, the report goes on to state that the increasing levels of mobile penetration (there are 3.2 billion mobile phone users worldwide) presents a significant opportunity for financial inclusion for the world’s unbanked, through services such as mobile money.
At the recent Mobile Money Africa Conference in Johannesburg, delegates agreed that Mobile Money is transforming African economies by improving peoples’ lives and creating choices of financial services for the previously unbanked.
Mobile Money is unlocking a previously inaccessible customer base like an 80-year-old villager, thereby increasing financial inclusion and enabling participation in mobile financial services for millions of the world’s unbanked.
Beyond financial inclusivity, mobile money offers the opportunity to stimulate economic growth. Take the case of Felix KwakuTetteh, a 21-year-old man from Klo Agogo in the Yilo Krobo District of the Eastern Region of Ghana.
He is the owner of Felix Ventures a small scale business dealing in the MTN Mobile Money service. Felix has been an MTN subscriber for seven years and also became a credit transfer vendor along the line. He decided to expand his business and registered to be a merchant for MTN Mobile Money three years ago.
He began his MTN Mobile Money service business with a capital of GHc300 and has been able to grow his capital to a sum of GHc2500. Felix Ventures has grown as a business from being a Mobile Money Merchant to a Mobile Money Wholesale Merchant.
Felix Ventures has created a channel for the students of Klo Agogo Senior High School to pay their fees via the mobile money platform. This has brought relief to parents who need to send money to their children in boarding school, but live far from the school.
Felix says the service has help reduce the number of students who are sent home from school for non-payment of school fees. He adds that Mobile Money has also helped to prevent students from travelling long distances to their homes for school fees and money for food, which interrupts their studies.
At Felix’s village, students have no choice than to stay in school instead of running away from school with the excuse of going home for their school fees. “Mobile Money has reduced the inconvenience for parents as well as helped to reduce truancy amongst students,” says Felix.
Traders and farmers in the community have also benefited from the service. According to Felix when farmers go to farm with their phone and run out of call credit they contact him to top up for them which in most cases is life saving for them.
The community is also made of traders who travel deep into remote villages, to purchase farm produce for retail purposes in the big cities. If these traders run out of money in the course of their purchases, they usually contact Felix’s Ventures to transfer money via Mobile Money into their account to facilitate their purchase. Looking at such examples, it is clear that the benefits of Mobile Money are immense.
Surprisingly, in sub-Saharan Africa, only an estimated 16% of adults are using mobile money services. The big question for financial gurus and financial services companies is now how to exploit Africa’s insatiable appetite for mobile phones to offer such services, particularly for the unbanked.
Even in South Africa, which has a well-developed banking system, around 19% of adults still don’t have access to financial products or services to manage their finances (According to the SA Banking Sector Overview report (November 2012). In the same market, mobile penetration is at 131%, which presents a significant opportunity for a service like mobile money to thrive.
It is, therefore, not surprising that Mobile Money, the ground-breaking low-cost banking solution introduced by MTN in partnership with The South African Bank of Athens at the end of last year, has shown a double-digit, month-on-month growth.
South African cellphone users are clearly embracing the speed and convenience of accessing a wide range of financial services directly from their mobile phones.
As MTN, we believe this is only the beginning of a major growth path for mobile money in South Africa. In fact, we envision a mobile money service that will further assist South Africa to achieve its financial inclusivity ambitions.
Fortunately, there are plenty of lessons across the continent, and other developing markets, on mobile money services, and its impact on the lives of ordinary people, as well as its ability to bring convenience to the rest of the populace.
In Ghana, for instance, MTN is offering life insurance to mobile money customers. While in Kenya, one operator has given users the ability to save and borrow money through their cell-phones while also earning interest. Eligible customers also qualify for emergency loans.
However, to ensure mobile money services continue to grow, more innovative solutions are required, and to achieve that, partnerships are critical. We are already seeing the results of unconventional collaborations benefiting consumers in some parts of the continent. A partnership with MFS Africa, for example, is allowing MTN Mobile Money users in countries such Rwanda, Cameroon, Benin, Ghana and Congo Brazzaville to receive short term advance on their salary as their employer uses MTN Mobile Money to pay salaries.
In addition to innovation and partnerships, there a number of challenges which need to be addressed to accelerate the growth of mobile money into the future.
Some of these barriers include operational challenges, such as driving usage and attracting customers; regulatory issues; a lack of financial education and examples of best practice; underinvestment; and infrastructure and network challenges. But all of these can be overcome through partnerships with suppliers and regulators alike.
Despite the challenges, I am confident that the mobile financial services market is well poised for growth into the future.
For service providers, expediting the growth of mobile money on the continent simply means finding a balance between enabling basic services that improve lives, and propelling our customers into the digital age, in keeping with their peers in the developed world.
If she wants to pay for services or transfer money to someone in another village, she goes to an agent and pays the desired amount, which is loaded onto her "account". The recipient can then withdraw the money from an agent in their village.
Mobile Money today represents a fundamentally transformational opportunity to connect billions of people to the formal and informal economy, the unbanked and banked citizens of the world.
According to GSMA’s Mobile Economy 2013 report, globally, more than 2.5 billion adults do not have access to a formal bank account and are not able to access basic financial services in order to save, borrow or transact.
However, the report goes on to state that the increasing levels of mobile penetration (there are 3.2 billion mobile phone users worldwide) presents a significant opportunity for financial inclusion for the world’s unbanked, through services such as mobile money.
At the recent Mobile Money Africa Conference in Johannesburg, delegates agreed that Mobile Money is transforming African economies by improving peoples’ lives and creating choices of financial services for the previously unbanked.
Mobile Money is unlocking a previously inaccessible customer base like an 80-year-old villager, thereby increasing financial inclusion and enabling participation in mobile financial services for millions of the world’s unbanked.
Beyond financial inclusivity, mobile money offers the opportunity to stimulate economic growth. Take the case of Felix KwakuTetteh, a 21-year-old man from Klo Agogo in the Yilo Krobo District of the Eastern Region of Ghana.
He is the owner of Felix Ventures a small scale business dealing in the MTN Mobile Money service. Felix has been an MTN subscriber for seven years and also became a credit transfer vendor along the line. He decided to expand his business and registered to be a merchant for MTN Mobile Money three years ago.
He began his MTN Mobile Money service business with a capital of GHc300 and has been able to grow his capital to a sum of GHc2500. Felix Ventures has grown as a business from being a Mobile Money Merchant to a Mobile Money Wholesale Merchant.
Felix Ventures has created a channel for the students of Klo Agogo Senior High School to pay their fees via the mobile money platform. This has brought relief to parents who need to send money to their children in boarding school, but live far from the school.
Felix says the service has help reduce the number of students who are sent home from school for non-payment of school fees. He adds that Mobile Money has also helped to prevent students from travelling long distances to their homes for school fees and money for food, which interrupts their studies.
At Felix’s village, students have no choice than to stay in school instead of running away from school with the excuse of going home for their school fees. “Mobile Money has reduced the inconvenience for parents as well as helped to reduce truancy amongst students,” says Felix.
Traders and farmers in the community have also benefited from the service. According to Felix when farmers go to farm with their phone and run out of call credit they contact him to top up for them which in most cases is life saving for them.
The community is also made of traders who travel deep into remote villages, to purchase farm produce for retail purposes in the big cities. If these traders run out of money in the course of their purchases, they usually contact Felix’s Ventures to transfer money via Mobile Money into their account to facilitate their purchase. Looking at such examples, it is clear that the benefits of Mobile Money are immense.
Surprisingly, in sub-Saharan Africa, only an estimated 16% of adults are using mobile money services. The big question for financial gurus and financial services companies is now how to exploit Africa’s insatiable appetite for mobile phones to offer such services, particularly for the unbanked.
Even in South Africa, which has a well-developed banking system, around 19% of adults still don’t have access to financial products or services to manage their finances (According to the SA Banking Sector Overview report (November 2012). In the same market, mobile penetration is at 131%, which presents a significant opportunity for a service like mobile money to thrive.
It is, therefore, not surprising that Mobile Money, the ground-breaking low-cost banking solution introduced by MTN in partnership with The South African Bank of Athens at the end of last year, has shown a double-digit, month-on-month growth.
South African cellphone users are clearly embracing the speed and convenience of accessing a wide range of financial services directly from their mobile phones.
As MTN, we believe this is only the beginning of a major growth path for mobile money in South Africa. In fact, we envision a mobile money service that will further assist South Africa to achieve its financial inclusivity ambitions.
Fortunately, there are plenty of lessons across the continent, and other developing markets, on mobile money services, and its impact on the lives of ordinary people, as well as its ability to bring convenience to the rest of the populace.
In Ghana, for instance, MTN is offering life insurance to mobile money customers. While in Kenya, one operator has given users the ability to save and borrow money through their cell-phones while also earning interest. Eligible customers also qualify for emergency loans.
However, to ensure mobile money services continue to grow, more innovative solutions are required, and to achieve that, partnerships are critical. We are already seeing the results of unconventional collaborations benefiting consumers in some parts of the continent. A partnership with MFS Africa, for example, is allowing MTN Mobile Money users in countries such Rwanda, Cameroon, Benin, Ghana and Congo Brazzaville to receive short term advance on their salary as their employer uses MTN Mobile Money to pay salaries.
In addition to innovation and partnerships, there a number of challenges which need to be addressed to accelerate the growth of mobile money into the future.
Some of these barriers include operational challenges, such as driving usage and attracting customers; regulatory issues; a lack of financial education and examples of best practice; underinvestment; and infrastructure and network challenges. But all of these can be overcome through partnerships with suppliers and regulators alike.
Despite the challenges, I am confident that the mobile financial services market is well poised for growth into the future.
For service providers, expediting the growth of mobile money on the continent simply means finding a balance between enabling basic services that improve lives, and propelling our customers into the digital age, in keeping with their peers in the developed world.
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