According to “Measuring Financial Inclusion: the Global Findex Database,” a new World Bank study, 16 percent of the population in sub-Saharan Africa makes money transfers via mobile phones, compared with 3 percent in the rest of the world.
The range of available mobile money services has increased as transportation and other infrastructure issues continue to hamper the adoption of traditional banking services. “Money transfers through mobile phones is a form of increasingly nontraditional banking that often doesn’t require users to travel or set up an account at a brick-and-mortar bank,” according to a statement issued by the World Bank. “Such mobile banking allows account holders to pay bills, make deposits or conduct other transactions via text messaging.”
According to the study, three quarters of the world’s poor people do not have a bank account. This is not due to poverty alone, but because of the cost, travel and paperwork required to open an account.
One example of mobile money providers is MTN Uganda, an affiliate of South African mobile service provider MTN (Mobile Telecommunications Network) that has attracted 2 million registered users since its launch in 2009. MTN reports that USD 100 million is transferred every month in Uganda.
MTN is also partnering with Western Union, a US-based financial services firm, to allow MTN users to send and receive money through Western Union’s pipeline to and from 200 countries. Western Union has reached similar agreements with mobile service providers in Kenya, Tanzania, Madagascar and Burkina Faso.
By John Crawford, Research Associate
About The World Bank Group
The World Bank Group consists of five institutions, all of which are owned by its member countries. The Group’s mission is to improve living standards for people in the developing world. The World Bank Group encompasses the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); the International Centre for Settlement of Investment Disputes (ICSID) and the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).
About MTN (Mobile Telecommunications Network)
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.
About Western Union
The Western Union Company, founded in 1851, is a US-based financial services and communications company. Western Union provides money transfer, communications and network services through approximately 430,000 agent locations in 200 countries. As of December 31, 2010, the Western Union Company reports total assets of USD 7.93 billion.
Sources and Additional Resources:
MicroCapital.org story, May 23, 2012, “MICROCAPITAL BRIEF: Grameen Foundation, KfW Bankengruppe, Access Africa Fund Invest in Mobile Microfinance Institution Musoni Kenya,” https://www.microcapital.org/microcapital-brief-grameen-foundation-kfw-ba…
MicroCapital.org story, May 19, 2012, “MICROCAPITAL BRIEF: Faulu Kenya, Airtel Form Partnership to Offer Mobile Credit,”https://www.microcapital.org/microcapital-brief-faulu-kenya-airtel-form-p…
MicroCapital Universe Profile: The World Bank Group
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The…
MicroCapital Universe Profile: MTN (Mobile Telecommunications Network),
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Mob…
MicroCapital Universe Profile: Western Union(Consultative Group to Assist the Poor),
https://www.microcapital.org/team/node/12428
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