Mobile Money Revolution: An Opportunity for Financial Inclusion in Africa

Abstract

The current increase in the use of mobile money in Africa can lead to financial inclusion. The question is: has it? A desktop research on mobile money in Africa was conducted in order to answer this question. Much attention was given to research conducted on M-PESA (a Kenyan-based mobile money operator and pioneer of mobile money in Africa). The review also made use of information on other mobile operators such as the Zimbabwean-based EcoCash of Econet Wireless Network. Literature suggests that mobile money subscribers mainly make use of mobile ‘payment' services such as person-to-person transfers and purchasing of airtime. However, the uptake of mobile banking and savings services remains quite low among the unbanked populations in the continent. Without an overwhelming uptake of such development-orientated financial services, there can be no meaningful achievement in terms of financial inclusion in Africa. It is argued that unless this opportunity for achieving financial inclusion is seized, it only remains an opportunity and nothing more. The challenge then lies with various stakeholders and policy makers to come up with mobile money financial services that attract the unbanked populations to go beyond person-to-person transfers. This research is carried out in the context of poverty reduction. Assumptions are that financial exclusion is a feature of social exclusion, both of which are closely related to poverty. Therefore, addressing financial inclusion is one specific way of fighting poverty and reducing vulnerability among the unbanked populations in Africa.