Sub-Saharan Africa leads the world in mobile money usage
MOBILE money is proving to be a fast-growing sector globally with various fintech companies, telecoms and banks fighting for a piece of the cake. The latest Global System for Mobile Communication Association’s (GSMA) 2021 State of the Industry Report on Mobile Money reveals glass-shuttering developments in the fintech space with Sub-Saharan Africa (SSA) leading various parts of the world.
Notably, mobile money providers became an integral part of the national Covid-19 response in many markets, offering a secure and ready channel to disburse pandemic relief payments to the public quickly, securely and efficiently.
According to the report, in 2020, the number of registered accounts grew by 12,7% globally to 1,21 billion registered accounts and 300 million monthly active accounts. Blazing a new trail, was the global value of daily transactions which exceeded US$2 billion dollars, and is expected to surpass US$3 billion a day by the end of 2022. SSA continues to coxswain the world having registered over 58 million new mobile money accounts over the past year taking the number of accounts to 548 million accounts, about 46% of the global tally. Comparatively South Asia accounts for 25% of the global sum, Eastern Asia and the Pacific 20% while Europe and Central Asia a meagre 2%
The value of global mobile money transactions surged 11% to US$767 billion in 2020, with SSA accounting for over 63% of the value at US$490 billion having grown by 23% in 2020.
The mobile money innovation has allowed various players on the continent to extend various financial services ranging from banking, digital credit services, insurance, agritech etc.
The epic advent of mobile money platform; M-Pesa by Kenya’s Safaricom proved Africa can also lead the world where digital innovation is concerned. M-Pesa has a presence in more than 10 countries with tens of millions of users across the continent, a concept which has been replicated by Econet in Zimbabwe successfully scooping several global awards, the most recent being the 2019 Digital Wallet Innovation Award.
This explains why East Africa accounts for 52% of Africa's 562 million registered mobile money accounts while southern Africa (South Africa, Namibia, Botswana Lesotho and Swaziland) a mere 2% with 11 million registered accounts.
In August 2020 Airtel Africa struck a strategic partnership with MoneyGram enabling Airtel Money customers to receive MoneyGram transfers directly into their mobile wallets from over 200 countries across the world - a year in which international mobile money remittances processed surpassed US$1 billion per month.
In Ethiopia as the telecommunications sector gets liberalised by the government, two leading mobile money providers
HelloCash and M-BIRR partnered a range of humanitarian organisations to facilitate cash payments across the country. Humanitarian cash assistance payments were deposited into over one million M-BIRR mobile money accounts in 2020, 44% of which were held by women.
Leveraging its affiliation with Orange Money a mobile money initiative Orange Bank Africa has extended the reach and uptake of its products. As of 2020, Orange Bank Africa had disbursed over 467 000 loans with an average value of US$44. In 2020, 355 000 mobile money customers were reached in Côte d’Ivoire with plans to expand across West Africa.
M-Koba is a joint initiative between Vodacom Tanzania and TPB Bank designed to digitise savings groups otherwise known as a Stokvel or Co-operative. To date, over 40 000 groups have signed up to M-Koba, with women making up the majority of members.
Zimbabwe, which has one of the region’s highest levels of mobile money penetration at over 90%, recorded a 23% decline in the total number of transactions recorded on the national payments system in 2020 after the government restricted mobile money operations in a bid to stabilise a runway USD to ZW$ exchange rate. I expect the positive trend to be sustained for SSA in the medium term, a development essential in bridging the financial inclusion and literacy gap in Africa.