Sub-Saharan Africa: the heart and soul of mobile money services

Sub-Saharan Africa: the heart and soul of mobile money services

In a recent blog post we wrote that only 20% of Africans have access to financial services due to various reasons. In Sub-Saharan Africa the number is even lower. We added also that this low percentage didn’t really mean that they are in no need of financial transactions. On the contrary, their needs are almost similar to those of citizens of every other region of the world. How do Africans close the gap between supply and demand? The answer to that is mobile money services.

A new report from GSMA shows as that over the last decade the tremendous growth of such services in Sub-Saharan Africa. At the end of 2016, deployments of such solutions had reached 140, representing more than 50% of total solutions in the world. At the same time, mobile money accounts have reached 277 million, overtaking bank accounts in the region two years ago.

In his comments about the results of the report, Mats Granryd, Director General of the GSMA said that “Mobile money is now achieving mass-market adoption in all corners of Sub-Saharan Africa, enabling millions of people to access financial services for the first time and contributing to economic growth and social development”.  As a result, more than 40% of adult population in seven Sub-Saharan African countries is using mobile money services. Also, findings from the report show that Sub-Saharan Africa has a smaller gender gap to bridge than other emerging regions.

As we can see, between 2011 and 2016 West Africa is steadily becoming the steam engine of mobile money services in the region.

Another very significant point of GSMA’s report is the evolvement of transactions through those services over the years. As we can see almost 30% of those transactions account for bill payments, international remittances, merchant payments, among other things. Five years ago, at the end of 2011 those transactions account for only 14%, a sign that the ecosystem is expanding over the years.

As mobile money adoption and use continues to rise, future growth can be unlocked by addressing a number of key drivers. According to the report drivers of the market could be:

  • Constant Investment to ensure growth
  • Policy and regulation in order to ensure the services can continue to reach low-income individuals
  • Rural markets: only 17% of of the addressable market has been captured in rural markets, remaining a source of untapped potential for providers
  • Infrastructure and technology which will improve seamless integrations, stimulating new and complex use-cases and products for users
  • Gender gap: the gap may be smaller than other regions but almost 225 million women still lack a mobile money account
  • Interoperability at the regional level would enable a rise in ecosystem transactions, such as cross-border remittance payments
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