According to a recent story published by The Guardian, a British newspaper, the African continent is now home to more than 500 million mobile phones and is experiencing a wave of innovation in the field of mobile banking. Individuals are now using their mobile phones to deposit and withdraw funds, transfer money and pay bills. The uptake in mobile banking services is made possible by platforms developed by telecommunications providers, like Safaricom of Kenya and Mobile Telecommunications Network (MTN) of South Africa, which have launched M-Pesa and MobileMoney, respectively. These systems complement thousands of physical kiosks, where individuals can deposit savings or withdraw cash. Unnamed experts are cited as predicting that global mobile phone transactions will exceed USD 1 trillion in value by 2015.
The Guardian article offers a survey of Africa’s “mobile banking revolution” but also highlights an initiative of the US-based nonprofit Grameen Foundation. In rural areas of Uganda, where the primary livelihood activity is farming, the Grameen Foundation is leasing phones to educated and entrepreneurial farmers who serve as community knowledge workers (CKWs). These individuals are responsible for spreading agricultural information and advice within a certain radius, including knowledge related to planting techniques, disease diagnostics and market pricing. CKWs are paid a “performance-based wage” that averages about USD 20 per month (by mobile fund transfer) for both communication to farmers and the collection of information from farmers. As of July 2011, the Grameen Foundation has trained 500 CKWs in 32 districts of Uganda [1].
In Lagos, Nigeria, the recent Unbanked Africa Summit included practitioners and government officials discussing the potential of mobile phones to transform Nigeria’s banking landscape. Of the country’s approximately 150 million people, 22 million individuals reportedly have bank accounts, while more than 80 million people have mobile phones. MTN reportedly covers 70 percent of mobile phone users, and services like MTN’s MobileMoney are promoting financial inclusion. The Nigerian Postal Service is also reportedly interested in generating new revenues by acting as a financial intermediary between banks and customers. Nigeria’s primary monetary authority, the Central Bank of Nigeria (CBN), has established the Payments System Vision 2020, which espouses electronic payments and is looking at ways of moving away from cash-based transactions [2].
By Rohan Trivedi, Research Associate
About Grameen Foundation:
The Grameen Foundation, a nonprofit based in Washington, DC, aims to help microfinance institutions throughout the world replicate the Grameen Bank’s joint liability model. It provides financial, technological and managerial support to provide new business opportunities and telecommunication services for poor people in rural areas. Though the Grameen Foundation is independent of the Grameen Bank, Muhammad Yunus, the founder of the Grameen Bank, serves on the foundation’s Board of Directors. Grameen Foundation reported total assets of USD 33.1 million as of March 31, 2010.
About M-Pesa:
M-Pesa is a Kenyan cellphone-to-cellphone cash transfer service. The “M” is for “mobile” and “pesa” means “cash” in Swahili. Launched in 2007 by Safaricom Limited, a Kenya-based cellphone service provider, M-Pesa was developed by Vodafone Group Private Limited Corporation, a British multinational mobile network operator, as part of its strategy to reach poor people with new goods and services. As of March 2011, M-Pesa reports having 13.8 million registered customers, a number equal to approximately 81 percent of Safaricom’s customer base or roughly one third of Kenya’s population.
About Mobile Telecommunications Network Group (MTN):
Established in South Africa in 1994, Mobile Telecommunications Network Group (MTN) is a multinational telecommunications provider that provides cellular telephone service. MTN also operates MobileMoney, a banking platform that can be used on cellular devices. As of December 31, 2010, MTN reports total assets of ZAR 154 billion (USD 22.5 billion), with approximately 141 million subscribers in 21 countries in Africa and the Middle East.
Sources and Additional Resources:
[1] The Guardian: “Africa’s mobile banking revolution”, http://www.guardian.co.uk/technology/2011/jul/24/mobile-phones-africa-microfinance-farming
[2] Business Daily Online: “How mobile banking can promote financial inclusion in Nigeria”, http://www.businessdayonline.com/NG/index.php/tech/78-computing/24768-how-mobile-banking-can-promote-financial-inclusion-in-nigeria
MicroCapital.org story, June 14, 2011: “MICROCAPITAL BRIEF: Central Bank of Nigeria’s (CBN’s) Cash Withdrawal Limit Expected to Impact Microfinance Institutions (MFIs)”, https://www.microcapital.org/microcapital-brief-central-bank-of-nigeria’s-cbn’s-cash-withdrawal-limit-expected-to-impact-microfinance-institutions-mfis/
MicroCapital.org story, June 7, 2011: “MICROCAPITAL BRIEF: Nigeria’s Guaranty Trust Bank (GTBank) Partnering with Mobile Telecommunications Network (MTN) to Offer Mobile Banking”, https://www.microcapital.org/microcapital-brief-nigeria’s-guaranty-trust-bank-gtbank-partnering-with-mobile-telecommunications-network-mtn-to-offer-mobile-banking/
MicroCapital.org story, May 10, 2011: “MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Microfinance Blog Discusses Role of Mobile Phones in Integrating Savings, Payments, Budgeting Services”, https://www.microcapital.org/microcapital-brief-cgap-consultative-group-to-assist-the-poor-microfinance-blog-discusses-role-of-mobile-phones-in-integrating-savings-payments-budgeting-services/
MicroCapital Universe Profile: Grameen Foundation, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Grameen+Foundation
MicroCapital Universe Profile: M-Pesa, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=M-Pesa
MicroCapital Universe Profile: Mobile Telecommunications Network (MTN), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Mobile+Telecommunications+Network+%28MTN%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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