The use of mobile money in sub-Saharan Africa could produce an estimated US$1.5-billion in fees for mobile-money providers by 2019, according to a BCG report, making it a key area for the attention of banks and MNOs.
According to a report by the The Boston Consulting Group (BCG), sub-Saharan Africa is adopting such services to pay utility bills or send money to relatives more quickly than other parts of Africa. While out of the top ten countries that use the most mobile financial services, eight of them are in Africa, sub-Saharan Africa boasts 43 per cent of active accounts.
This growth has been driven by the regions high mobile phone penetration, which has proved invaluable to the region’s unbanked and allowed them to access a new level of financial inclusion using their mobile. BCG estimates that there will be around 400 million unique mobile phone subscribers in 2019, and almost 150 million traditionally banked sub-Saharan Africans. The expected gap still left by traditional banking means that mobile money still has much more room to grow, despite the success of m-Pesa.
“Mobile financial services aren’t new, but they’re at an inflection point and adoption is accelerating,” said BCG partner and coauthor of the report Hans Kuipers. “This is not something that African banks or MNOs can afford to ignore. A bank or MNO that isn’t active in the market runs the risk of becoming less and less relevant.”
“Banks and MNOs are complementary in this space; each has something the other needs,” he added. “In many cases, it will make sense for them to team up.”
“The vendors that want to establish a strong market position are going to need to find the right partners and start developing an offering,” Kuipers said. “The time to do those things is now.”
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