The World Bank, African Development Bank (AfDB) and the African Union (AU) have praised the use of mobile money services for enabling economic growth in the continent.
In a report titled eTransform Africa, the three acknowledged thatthe explosion of mobile phones in Africa has been accompanied by local innovations such as mobile money, aimed at addressing the socio-economic issues facing the continent.
According to the report, advances in ICT offer unique opportunities for financial services sector development in Africa that touch facets of the financial services sector ecosystem, from innovations and cost reductions for user access to devices and transmission technology.
In the report, developments in mobile money are suggested as capable of accelerating the drive towards development goals, allowing African countries to spring from challenges with regard to financial inclusion and financial management.
The report however cautions that many consumer-related challenges exist in the mobile money sector in Africa, including transactional capabilities and simple market information.
Telecommunications operators and other major players need “to build upon consumer acceptance of these new models, and leverage the transactional capabilities to introduce a more diverse portfolio of financial services”.
Other challenges emerge from the government and regulatory demands.
“In the innovative models of mobile financial services, lack of clarity regarding the roles for financial institutions and mobile operators can cause market fracture or lead to redundant investments that are transferred as costs to the consumer,” the report said.
The report had Kenya and Senegal as their case studies for the mobile money sector. Senegal’s mobile money sector, according to the report, is on the growth path. In Kenya, the sector has been largely embraced, with users now able to pay day-to-day utility bills through mobile money services.
