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LWOL: A discussion with Joleen Young on financial inclusion and transacting in Africa

Last week our Payment Advisory Expert Joleen Young made herself available to do a live Q&A session on our Lunch with our Leaders (LWOL) LinkedIn forum about the important topic of financial inclusion and transacting in Africa.

Joleen, who worked with the BoE Bank and Standard Bank Group prior to joining the KPMG team, is a specialist in the payments industry, having more than 17 years of experience in the field. Among her many laurels is her contribution to the reform of the South African National Payments System (NPS) from 1997 to 2006 and to the formation, structure and objectives of the SADC Payments System Project.

Prior to Joleen’s LWOL hour, we posed the following question to get the ball rolling: “Is mobile payment/banking just a flash in the pan or … could this be a solution to drive financial inclusion and transacting in Africa?” Many of you responded with your thoughts, and also asked Joleen for her opinion on various aspects of the issue. Here are the highlights from that discussion:

Overlapping regulatory domains

  1. It will be very interesting to contrast innovation against regulation. Many regulators are still concerned with mobile payments.
  2. You are quite right there is a regulatory tussle between the regulators and the MNO innovators. There is a fundamental issue that needs to be dealt with first … this is in the area of the “overlapping regulatory domain”.

MNOs are regulated by the Ministry of Telecommunications and Financial services/banking/payments are regulated by the central bank. This is where many of the central banks are starting to cooperate with the telecommunications regulator to strike a good balance between innovation and regulation.

Uniquely tailored solutions

  1. Mobile payments/banking is not a flash in the pan. African countries just need to realize that the implementation in each nation will need to be tailored to the unique cultural and socio-political factors located there. What worked in Kenya may not work in Ghana, etc.  Another challenge comes with awareness and education which are critical to customer adoption. This is a very capital-intensive exercise which most companies cannot sustain over a long period of time.  Also there are challenges with how the services are marketed. Most companies are marketing it as a service to banked individuals rather than unbanked. The cost of reaching the unbanked may cost more in the short term but that is where the big wins will occur.

A. Your questions are on point; each country is different and as such the regulators are looking at their neighbours and learning from their scenarios and mistakes and retro-fitting these into their environments. Some regulators – an example is Nigeria – where the central bank has reviewed the mobile/e-money regulation in a number of countries on the continent and have found the balance in creating an enabling regulatory environment.

This environment allows companies like Paga to create the interoperable platform and provide these services to banks to offer mobile banking and payments to their customers. The fundamental principle here is that this is a bank lead model and not an MNO led model.

Your second point deals with education, which essentially translates into “how can people trust the mobile banking system”. This is an industry with issue which needs all the key stakeholders (Government; Central Bank; Banks; MNOs; Companies like Paga; Retailers; Post Office; etc.) to participate in the campaign to provide bank and payment services to the unbanked and excluded segment of the population.

Targeting the unbanked

Q. The concentration of electronic payments continues to be in the urban/metropolitan cities. In tackling the financial inclusion objective, what specific initiatives can the regulators and players do to make the rural areas more attractive? Players have often cited the huge cost of setting up the infrastructure and support framework to serve these segments of the market. For instance, what role should the banks be playing in the deployment of acquiring devices in the rural communities given the struggles they have in providing sufficient support coverage for devices in the cities?

I argue that a number of players in the mobile payments space (especially in Nigeria) have not truly mapped out the journey of the target customer in designing their payment solution for the under-served/financially excluded segment – what is their motivation for making or receiving a payment, how do they want to transact, what are the challenges/barriers they face today in executing these transactions, and how can a mobile payment solution address this?

This is part of the reasons why the product design, the marketing and positioning continues to speak to the already banked population who continue to struggle with what to do with the mobile payment solution different from the capabilities already existing in most of their mobile banking products today. What is the genuine need being served by the existing array of mobile payment solutions and who is the target?

A. Your comment is on point… This goes to my earlier point around M-Pesa in ZA, when banks are faced with a new-breed of competitor i.e. MNOs who have the technological means to provide a wide range of services based on an infrastructure they have created (for voice and data) that can be applied to carry financial transactions, the first reaction is one of defence.

It is then natural that they would approach their current customer base with a new product as opposed to looking at partners, like MNOs to fulfil the real need in the country… reaching the unbanked.

We hope you find this as interesting as we did yesterday. Should you have further queries or you want to have a chat with us, please contact Joleen via or

David Okwara

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