The speed and breadth of mobile money adoption is transforming the African financial landscape. Jane Obree, JUMO’s Commercial Lead, explores the future of finance and trends shaping Africa’s financial landscape. From exponential growth to regulatory advancements, Jane considers the impact of mobile money on financial inclusion and economic development across the continent.
Over the last twenty years, the landscape of mobile money in Africa has witnessed a remarkable transformation, with a steady upward trajectory in growth. Initially taking 17 years to amass 800 million registered accounts, the past five years have seen a surge, doubling this figure. This momentum shows no signs of waning, underscoring the pivotal role mobile money plays in the financial inclusion of millions across the continent.
The advent of mobile money as an alternative cashless currency and means of transaction represents a paradigm shift in financial access, allowing millions of unbanked individuals to store and manage money using their mobile devices. Despite this progress, a significant proportion of Africa’s population remains outside the traditional banking system and people find themselves faced with limited and expensive banking services.
This gap is being bridged by mobile money, which offers an accessible, cost-effective, and secure method for financial transactions.
The impact of mobile money on Africa’s financial landscape is profound, with the continent leading globally in adoption rates. According to the GSMA, the global count of mobile money accounts reached nearly 1.6 billion in 2022, with Africa boasting over 781 million of these accounts. This region not only accounts for nearly half of the global figures but also dominates in transaction volumes, with Africans conducting over 45 billion transactions valued at over $836 billion in the same year. East Africa remains at the forefront, while West African nations, notably Côte d’Ivoire, Ghana, and Senegal, have shown significant growth, largely attributed to regulatory advancements.
This growth has been evident in JUMO’s live operations in Ghana where we’ve disbursed over 83 million loans to 6.5 million people, and in Côte d’Ivoire where we joined forces with MANSA Bank and MTN Mobile Financial Services in 2021 to advance financial inclusion. Nigeria, Africa’s largest economy with over 220 million people, is expected to be the next mobile money growth champion in West Africa. The introduction of the payment service bank (PSB) license by regulatory authorities has had a significant impact in Nigeria where mobile money usage is still in its nascent phase, but is steadily growing. Our plan is to pilot a lending product there soon and in Cameroon, followed by Benin.
The benefits of mobile money are not only limited to individuals and service providers, but also to the African economy. Research highlights the integral role of mobile money in driving financial inclusion and, by extension, fostering economic growth and reducing disparities. Findings suggest that even modest increases in fintech and credit availability can have tangible impacts on economic expansion. JUMOs research specifically indicates that access to credit and savings has a fundamentally positive impact on the livelihood of the small business owners and communities we serve.
Despite these strides, the journey is far from complete. Over half of the continent’s population remains unbanked, presenting an unparalleled opportunity for mobile money to bridge this gap. However, this growth is not without challenges, which range from regulatory hurdles and the increase of fraud and data protection issues, to the need for improved customer awareness and integration with the broader financial ecosystem. Overcoming these obstacles requires concerted efforts from all stakeholders, including mobile money providers, fintech firms, traditional banks, and regulatory bodies, to foster a collaborative environment conducive to innovation and inclusivity. This is why JUMO favours a partnership business model.
The future of mobile money in Africa hinges on the symbiotic relationship between technology and regulation, underscored by a commitment to aligning fiscal policies with the broader goals of financial inclusion. By addressing barriers to account ownership and enhancing customer literacy and access, mobile money can extend its reach, offering essential financial support to the unbanked. This collaborative effort among banks, fintechs, telcos, and policymakers is not just about sustaining growth but about crafting a more inclusive financial ecosystem that propels socio-economic development across Africa – aligning with JUMOs mission to make financial services available to everyone.
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