BLOG
FINANCIAL TECHNOLOGIES
Covid-19 drives more West Africans to mobile money
30 August 2022Almost 15 years after the introduction of mobile money in Sub-Saharan Africa, the region has evolved to a leader in adoption of such services. Despite overall success of this transition to digital payments in the region, mobile money’s penetration in West Africa remained relatively low in comparison with East Africa which has proven to be the enduring epicenter of mobile money.
In countries such as Kenya, Uganda or Tanzania mobile money is already the currency of choice for everything from daily shopping to paying bills, as a recent article of World Economic Forum notes. On the contrary, in West Africa mobile money arrived later in West Africa, where barriers include low literacy and lack of trust as well as lack of necessary documents and a preference for cash.
Data from the latest report of GSMA, “State of the Industry Report on Mobile Money”, gives us a small glimpse. In 2019, West Africa was the fastest growing sub-region of Sub-Saharan Africa in terms of mobile money accounts (14,5{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e}) and transaction value (34,9{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e}). On the other hand, active accounts and transaction volume showed a dramatic decrease of 21,5{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} and 28,4{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e}, respectively. Bittersweet data don’t you think?
2019 State of the Industry Report on Mobile Money, GSMA
According to GSMA, mobile money in West Africa is growing fast but still used by only about one in four adults but industry experts and analysts expect the outbreak could be an opportunity to increase usage and include more people in the digital economy, noting that “right now there is a really key trigger point, and that could be seized on to leap forward”.
In response to the outbreak of coronavirus all aspects of the mobile money ecosystem seem to be aligned. People have now a new incentive to go digital, operators lower barriers to help people avoid cash and governments make efforts to encourage digital payments and ease regulation.
Market executives expect that Covid-19 will work as a catalyst for high adoption of mobile money, estimating that West Africa will see an uptick in new accounts and transactions, as a result of the lower fees. Many say that in every major crisis lie an opportunity. In the case of West Africa the crisis of Covid-19 may hide the opportunity of a greater financial inclusion.
