How Mobile Money is promoting Financial Inclusion in Africa

Financial inclusion means that individuals and businesses regardless of their status, have access to useful and affordable financial products and services that meet their needs. These financial products may include but are not limited to payments, savings, credit and insurance – delivered in a responsible and sustainable way. 

As such, being able to have access to a transaction account is the first step toward broader financial inclusion, since a transaction account allows people to store money, and send and receive payments. A transaction account serves as a gateway to other financial services, and through that to social inclusion, giving people access to

According to the world bank, great strides have been made toward financial inclusion and 1.2 billion adults worldwide have gotten access to an account since 2011. Today, 69% of adults have an account. The World Bank adds that in Sub-Saharan Africa, there are 350 million unbanked adults and this accounts for 17 per cent of the global total. This shows that there is still a lot of work to be done. 

Furthermore, since 2014, Africa’s big financial inclusion gains have been driven by mobile money, not old school brick-and-mortar banks. In Cote d’Ivoire and Uganda, mobile money penetration rose while bank account ownership was mostly flat. At the same time, mobile money has spread from East Africa to West Africa. Three years ago in Senegal, only 6% of adults had a mobile money account; today, the share is 32%.

Mckinsey recently described ‘Africa as the global leader in mobile money’. This is because mobile money has become an important component of Africa’s financial services landscape. Mobile network operators (MNOs) have dominated mobile money services in Africa for the past decade. 

More recently, fintech companies have established a solid footing in the market, and a number of banks are beginning to compete aggressively for mobile banking customers. While some banks have chosen to “go at it alone,” others are forming partnerships in hopes of reaching the market faster. It is noteworthy to say that in Africa today, there are 100 million active mobile money accounts (used by one in ten African adults). This far exceeds customer adoption in South Asia, the second-biggest region for mobile money in terms of market share, with 40 million active mobile money accounts (used by 2.6 per cent of adults).

Despite these many achievements in Africa,  mobile money did not just start today. Sending and receiving money by mobile phone was pioneered in 2007 by Kenya’s Safaricom with its M-Pesa platform. Then it allowed Kenyans to simply send and receive money without visiting the bank. Presently, M-Pesa now has over 50 million active users across Africa. This makes it the most popular mobile money platform in the continent, and Africa’s largest fintech.

Beyond M-Pesa, there are now hundreds of fintechs on the continent providing financial services to the underserved and the underbanked. There is Flutterwave, Paga, and Paystack. Now, the competition to offer financial services has intensified. You will find these fintechs in rural areas. These are places where the traditional banks have always avoided.

Mobile money services have the opportunity to deepen financial inclusion in developing economies through low transaction costs, increased access in rural/low-income areas, and ease of use. 

According to the GSM Association, the body that represents the interests of mobile operators worldwide, mobile money providers face challenges in launching and scaling the full breadth of mobile financial services in countries with non-enabling regulatory environments. They also note that enabling regulatory frameworks accelerate the development of the mobile money sector, and countries with regulatory frameworks that are not aimed at the mobile money sector show a smaller number of registered and active mobile money accounts, as well as lower agent activity rates than countries with enabling regulation. 

In most countries, including Zambia, South Africa and Nigeria, mobile money operators are required to hold a license from the banking regulator to operate a mobile money service, placing them under the supervision of the regulator. This has no doubt enhanced their services and encouraged innovation.


Mobile money can only continue to grow in Africa. Over the years it has recorded considerable growth. Financial services are no longer the monopoly of inhabitants of cities. With mobile money, rural dwellers can also enjoy these services. Hence, mobile money is democratising the whole banking space in Africa. Thankfully, the government is not taking a back seat here. It is also working to regulate and sanitise the mobile money business by issuing licenses to competent and quality operators. And with the continuing growth and development of mobile money, regulators and operators must continually evolve in their approach to risk mitigation and anti-money laundering compliance in this sector.


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