Box VII.1: Examples of Mobile Financial Service Deployments in Africa

Box VII.1: Examples of Mobile Financial Service Deployments in Africa

West African Economic and Monetary Union: Several mobile network operators in the region (Orange, Airtel and MTN) have partnered with banking groups (BNP, Société Générale, and ECOBANK, Bank of Africa) to offer mobile financial services. Eleven (11) mobile financial service offerings are currently available in six out of the eight West African Economic and Monetary Union (WAEMU) countries, namely Benin, Cote d’Ivoire, Mali, Niger, Burkina Faso, Senegal. These deployments attracted 1.4 million subscribers which is comparable to the number of cardholders in the card-based interbank network as of December 2011. Mobile financial services hold great promises for the region as less than 15% of the population have access to formal financial services while the average telecom penetration rate is 40%.

Kenya: M-Pesa is often cited as the pioneer of mobile financial services in Africa. It is currently the leading mobile money service in Kenya, accounting for more than 27,000 agents who handle over 30 million transactions daily. In Kenya 19% of airtime sold was purchased using M-Pesa. According to the World Bank “new potential for mobile money has come with the rise of interest-earning bank-integrated mobile savings systems, beginning with the launch of the M-KESHO system in March 2010”.

South Africa: mobile financial services are widely used in South Africa with approximately 6 deployments: First National Bank (FNB) with around 2 million customers, Wizzit with over 250,000 subscribers, Flash Mobile Cash by Eezi with a network of 42,000 home shops, MTN Mobile Money, and finally Vodacom, in partnership with Nedbank offering M-Pesa.

Tanzania: more than 4.3 million mobile financial transactions have been made since the country introduced such services in 2007, equivalent to 40% of the country annual GDP. The Bank of Tanzania has encouraged operators to go beyond person to person (P2P) services and offer other mobile financial services including business to person, business to business, micro savings, micro insurance, micro loans and credit history information. Initial results have been recorded with some mobile financial service providers partnering with local savings groups to provide savings services and others encouraging consumers to link their mobile e-wallet to financial institutions.

According to GSMA, there are four main services offered by mobile financial service providers: sending money, paying bills, receiving bulk payments and purchasing airtime. These are called functional transactions as opposed to cash conversion transactions or administrative transactions such as changing one’s pin or requesting a balance. As of June 2011, airtime purchases accounted for more than 68% of all transactions observed in Africa, followed by