By
Chidi Okpala
As the story of the mobile
phone and its contribution in bridging the digital divide in Sub-Saharan Africa
unravels, the device’s revolutionary role in facilitating transactions and wealth
distribution in the region is shaping up in an unprecedented way.
The speedy penetration of
mobile telephony and the exclusion of most people from the formal financial
system because of the existing socio-economic challenges seem to be the largest
contributors to the mobile money wave. For, although only about 10% of people
with primary or no education have bank accounts, compared with 55% of those
with tertiary education, the share number of people using mobile in Africa is
the highest in world, according to a recent study on financial habits by the
Gates Foundation, the World Bank and Gallup World Poll.
But the mobile-money wave is
not purely accidental. For their part, mobile telecom players, such Airtel
Africa, are investing millions of dollars in infrastructure, consumer education
and awareness to broaden mobile-money propositions and drive financial
inclusion.
Generally, mobile money is a
substitute both for brick-and-mortar banks and sending cash through, say, bus
drivers, as has been the case in most of Africa. And because it empowers people
who cannot get to a bank branch or an automatic teller machine (ATM) to access
financial services, its availability helps offset the bias of the banking
system towards the educated. This brings good news to millions of Africans, say
farmers whose educated children are working abroad, as they will now enjoy a
portion of the US$40 billion that experts predict will be transferred into
Africa by 2016.
The opportunities are huge
not just for telecoms but also for the ecosystem of service providers in the
mobile money transaction cycle. GSMA, an industry body, reckons that as at June
2012, there were about 57 million registered mobile money users in Sub- Saharan
Africa representing nearly 70% of the world’s mobile money user base. Yet, close
to 500 million people remain unbanked in the region despite their being a
slightly larger number of active SIM connections. So getting the pool of those
unbanked into the system - though mobile money - is not impossible.
Key trends will continue to drive
the expansion of mobile money in sub-Saharan Africa. Firstly, availing mobile money to customers means they shift cash
transactions into a digital ecosystem relatively cheaply, securely, and
reliably. For instance, in a majority of the 17 countries where we operate in
Africa, Airtel Money is helping customers make payments and transfer money in
unprecedented ways. Across all our operations, Airtel Money is now being used
to pay civil servants including the military, the police force, and pensioners through
their mobile phones. Many more are utilising the wide range of services – from
making merchant payments to settling water and electricity bills. They are able
to conveniently send money to loved ones for food, clothing, medicine and
books.
Secondly, as GSMA notes, many
policymakers and operators have recognised the strategic importance of mobile
money as both an opportunity to increase financial inclusion and a revenue
generator. Apart from data, powered by increasing 3G and 4G penetration across
our pan-African markets, Airtel has identified mobile commerce as an increasing
source of revenue growth and diversification while driving cost efficiencies
through airtime and data purchases by customer via Airtel Money.
There’s a lot to make out of
the disparities in access to telecoms services, too. Because, telecoms are
deploying smarter mobile networks, there are multiple opportunities in
addressing latent demand in mobile money. Market segments such as rural areas
will be key: sub-Saharan Africa lags the global average (about 44 percent) in
the proportion of people with bank accounts. And women in the region, 88% of
whom did not have a formal bank account, will increasingly be critical to
mobile operators.
Thirdly, as well as enabling
payments, mobile technology is capable of extending the reach of financial
services through products like insurance, credit and savings. There is, more
than ever before, a need for effective relationships with banks and other
financial institutions to meet a broader range of customers’ financial needs, thereby
deepening financial inclusion. Airtel is partnering with the region’s foremost
financial-services providers who are now offering unsecured credit and insurance
products in various countries respectively.
Last but not the least,
operators will be proactively developing the mobile money ecosystem through
additional products and services. At Airtel, cross-border mobile-money
capability will be unleashed leveraged our unique footprint and extending
maximum convenience to Africans for remittances and small trades.
As Africa’s technology drum beats
assiduously and rumbles louder, the gap in financial service provision between
telecoms and financial-service organisations will surely continue to narrow.
And for customers, the revolution is bound to bring unbridled joy in just what
a mobile phone can do.
Chidi
Okpala is the Director and Africa Head, Airtel Money at Airtel Africa
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