This article compares the impact of mobile money on kenya, the largest economy in east africa, with its impact on nigeria, the largest economy in west africa and africa as a whole. A different approach to mobile money in africa the economist. The case of kenya, ghana and nigeria conference paper pdf available may. Regulatory impact on mobile money and financial inclusion.
Mobile money provides a fully integrated system for users to make payment and transfer money in a very simple and convenient way. Mobile money started as a payment continue reading why mobile money transformed kenya, but failed to. May 19 mobile money has changed from being a fad into a fullblown industry. An enabling regulatory environment is essential for continued growth of mobile money services and further financial inclusion.
In many markets, individual outlets may serve several mobile money service providers. Mobile money services have been deployed in developing countries as a means of extending financial services to the unbanked, but more robust research is needed on the direct link between the use of mobile money services and easier access to finiancial services. Pdf regulatory frameworks and implementation patterns. Greater geographical reach, lower cost, and speed also contribute to the expansion of these services. Rapid mobile adoption in west africa since the turn of the decade has been a boon for the local mobile money industry. The guidelines were developed in consultation with the uganda communications commission ucc, the private sector and other relevant stakeholders. Ghana is the fastest growing mobile money market on the african continent owing to a number of initiatives being implemented by the government, m. Africa is the global leader in mobile money, which has become an important component of africas financial services landscape. Mobile money services have positively impacted africa since 2007. More recently, fintechs have established a solid footing in the market. The ongoing vibrancy of the mobile economy in subsaharan africa depends heavily on the actions. Mobile money is a mobile payments system based on accounts held by a mobile operator and accessible from subscribers mobile phones.
Mobile money in africa is currently in use in 36 of the 47 countries in subsaharan africa, and is used prominently throughout east africa. Ghana is fastest growing mobile money market in africa. In kenya and uganda, over half of the adult population uses digital financial services. Worldremit and mtn group today announced that worldremit customers can now send money instantly to mtn mobile money wallets london, uk and johannesburg, south africa, 28 january 2016. More recently, fintechs have established a solid footing in the market, and a number of banks are beginning to compete aggressively for the mobile banking customer. We see very different patterns of financial development in respect of mobile money. Subsaharan africa is the only region where more than 10 percent of adults use mobile money. Mobile money africa africas leading resource for digital. It further examines different regulations that have. Informal sector gdp contribution, link to formal sector, contribution to job generation vastly unknown in africa yet the informal sector is where the majority of the. Telcos chamber denies seizure of deceased momo users account by telcos.
According to the 2015 global index report by the world bank, the countries whose penetration rate for mobile money accounts was over 10% were all located in subsaharan africa. Africa is currently rising as a major area where mobile money is spreading. Mobile money services started in kenya in 2007 through mpesa m for. Then, when customers wish to cashin, they give the agent physical cash, and the agent in turn transfers a corresponding amount of efloat from their account to the customers account. For more information on full subscription access, contact us. As many as 30% of cell phone users in africa report that they participate in mobile banking a new report from the pew research center shows the transformative power of the cell phone in the worlds fastestgrowing market for mobile technology. The conversion of cash into electronic value and vice versa happens at retail stores or agents.
The paper focuses on innovative mobile phones money and banking options in four african countries kenya, nigeria tanzania an d uganda. We are an approved emoney issuer governed under the financial services act 20 and remittance provider class b under the money services business act 2011 msb. The top 7 african countries for mobile money infographics. Mobile money in subsaharan africa and its implications by. Leading mobile money operators in subsaharan africa paid out 47% of their revenues as commission. What 1% new tax on mobile money transactions means.
In a typical mobile money system, agents purchase efloat from the mobile money operator by delivering physical cash to the operator. It highlights differences among the 4 countries and their financial regulatory environment. Why mobile money is popular in africa, but not in the us african countries like kenya have leapfrogged traditional banking systems by using mobile phones to. Mobile network operators mnos have dominated mobile money services in africa for the past decade. The growth of mobile money in africa millions of africans utilize their cell phones to manage their finances. According to mastercard, africa is taking the lead in the market. Government is proposing a new tax on mobile money transactions.
Regulatory frameworks and implementation patterns for mobile money in africa. Please provide your account email and password below new users can sign up for a public account. In 2014, seven new markets joined the ranks of countries where there are more mobile money accounts than bank accounts. Worldremit and mtn group today announced that worldremit customers can now send money instantly to mtn mobile money wallets in rwanda, uganda and zambia. Transfer market a different approach to mobile money in africa. Africa is the global leader in mobile money, which has become an important component of africa s financial services landscape. Mobile money in emerging markets mobile money in emerging markets is the second. Mobile money in africa mobile money and related financial services are continuing to see rapid growth in africa, and are of major interest to a number of businesses in the region from financial institutions and technology firms through to governments. The growth of mobile money in africa the borgen project. Bankelele, an awardwinning kenyan blogger on all things banking, shared some pragmatic insights from nairobi, the heart of africas mobile money revolution. Send money to african mtn mobile wallets worldremit.
According to the tax proposals contained in the excise duty amendment act 2018, a tax of 1 per cent of the value of the transaction will apply on mobile money transactions on receiving money, making payments and. Why mobile money transformed kenya, but failed to take off. In its simple form, mobile money allows consumers to use their mobile phone as a virtual wallet, storing cash which they can either spend with retailers, pay service providers, transfer to peers, or exchange for physical cash with a participating agent. Pdf mobile money services, regulation and ecosystem in.
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