Mobile money accounts surpasse bank accounts – IMF

International Monetary Fund (IMF) has said the use of mobile money has grown exponentially over the past 10 years in Subsahara Africa , making the region the global leader in mobile money innovation, adoption, and usage.

It said M-Pesa services are now offered in countries as diverse as Albania, D.R. Congo, Egypt, Ghana, India, Kenya, Lesotho, Mozambique, Romania, and Tanzania.

Prospective agreements with MTN Group will allow both Orange Money and M-Pesa services to cover an even larger number of countries across the continent. Mobile money accounts now surpass bank accounts in the region and greater financial inclusion has benefited large swathes of the population.

According to the IMF, while access to traditional banking services remains almost a mirage for most Africans, the near-universal availability of mobile phones has allowed millions to access mobile money services.

Sub-Saharan Africa is the only region in the world where close to 10 per cent of GDP in transactions occur through mobile money. This compares with just seven per cent of GDP in Asia and less than two per cent of GDP in other regions. Most African users now rely on mobile payments to send and receive money domestically. 

Increasingly, they are taking advantage of new services to also send and receive money internationally. In addition, they use mobile money to pay their bills, receive their wages, and pay for goods and services.

Innovation is allowing Africans to move up the “financial services value chain.” From mobile payments, customers in sub-Saharan Africa are gaining access to mobile banking and other services as they open saving accounts, take out loans, purchase insurance, and invest in Government securities or in stock markets with a few touches of their mobile phone. They can even “borrow” electricity and pay later instead of sitting in the dark.

New innovations in fintech are proceeding rapidly. New technologies are being developed and implemented on the continent, and they have the potential to yield significant benefits for Africa. Recognising this, foreign investors have stepped up their backing for African fintech firms, while those firms develop solutions adapted to the region, for example, to cater for the relatively lower internet speed in some areas. The falling price of smartphones will also help the region reap the rewards of internet-based solutions.

It further said: “In our new paper, we suggest that the challenge now is for the continent to leverage this success in mobile money. It needs to transition to other fintech services and a digital economy”.

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