What’s new in the world of African mobile banking?

Things move quickly in Africa’s mobile industry, which includes mobile banking. As mobile banking services gain ever greater traction throughout the continent, the sky seems the limit in terms of what can be done and who can be reached. Telecoms companies have a huge unbanked population to tap into, particularly in poorer and rural areas, and consequently increasingly more countries on the map are having new and innovative mobile banking options presented to them.

Here are some of the latest developments in the world of African mobile banking…

Tanzania – mobile banking subscriptions rising steeply

Previously somewhat overshadowed by the roaring success of mobile banking in Kenya, Tanzania’s mobile banking story is rapidly coming into its own. Governor of the Central Bank of Tanzania Benno Ndulu told Euromoney that in his country “65% of the population had access to mobile phones in 2009, but only 6% were using banking services. In just four years, this has grown to 44% of all the adult population using mobile money services. There are 12.3 million adults actively using mobile money services, transacting at least once every 90 days. Half of them use the system to save, not just transfer money.”

Adding to the popularity of mobile banking as well as its potential for universal adoption is the fact that those who cannot afford a mobile phone can still access banking services by buying a SIM card which they plug in at vendors.

Says Ndulu, “As we get agents further into the rural areas and as we improve the range of products and make these services more amenable to meeting the needs of the population, [access] should be reaching 80% in the next five to 10 years.” That’s an impressive forecast, but given developments thus far not an unfounded one.

Zambia – first ever mobile banking services in the works

MTN Zambia, the country’s second largest mobile operator after Airtel Zambia, has been pushing for the Bank of Zambia to engage with mobile banking, as yet not an option in the southern African nation of 14 million. Two weeks ago the bank announced that it will partner with the country’s mobile operators to make this possible, but urged the latter that they must ensure the service is available within all quarters of the country.

Amon Jere, MTN Zambia’s chief marketing and distribution marketer, says that only 37% of the population engage with financial services, however more than 70% own mobile phones. Mobile banking would therefore have the potential to more or less double the number of citizens with access to formal financial services.

“Our conversations with the Bank of Zambia,” says Jere, “highlight the fact that the Central Bank is concerned about accessibility to banking services especially in rural areas. This is a concern we share and as a leading communications solutions provider, MTN Zambia provides a solution through mobile money. It is mainly about facilitating mobile banking services for the Zambian market.”

Malawi – new E-Money service introduced

FDH Bank in conjunction with Airtel Malawi recently launched a new mobile money service in Malawi that they named E-Money. “FDH Bank in partnership with Airtel Money brings to the market a unique mobile banking solution like never before,” says the former company’s MD Philip Madinga. “FDH E-money is the first of its kind as it allows cashless ATM withdrawals on our ATMs, amongst other exciting capabilities.”

FDH Bank is a rising financial service provider in the small eastern African nation, while Airtel Malawi is an arm of India-based Bharti Airtel Limited, the mega telecoms company with holdings in 20 countries. Airtel Malawi says that it during its two years of existence it has already gathered 700,000 customers, a figure it hopes to increase through its new service offering.

DRC – mobile banking making financial services more inclusive

Mobile banking has been gaining ground surprisingly rapidly in the DRC this past year, with Airtel DRC and Vodacom enjoying soaring numbers. Key to this rise in popularity is the use of mobile money in paying government employee salaries. Airtel says it has 65,000 registered government employees in its database and Vodacom is thought to have about 13,000.

Civilian subscriptions have also been on the rise. Locals are excited about mobile banking, saying it makes formal banking available to the non-rich. DRC banks charge roughly US$130 to open a simple savings account and a staggering US$30 for a bank card, making formal banking a truly exclusive affair in such a poor country. Text messages by contrast put customers back by only US$1.80 and monthly mobile banking fees are US$5. Consequently numerous low-income individuals such as taxi owners and hawkers are now able to engage in formal financial services through their mobile banking accounts.

Sudan – Hassa country’s first mobile banking service

Mobile operator Zain Sudan, a subsidiary of Kuwait-based telecoms company Zain that operates in both the Sudan and South Sudan, has joined forces with the Bank of Khartoum to offer a new mobile banking service called Hassa. Hassa is Sudan’s first mobile banking initiative and as such marks an important step forward for the nation’s financial services sector.

Zain Sudan’s CEO and MD Elfaith Erwa adds, “Hassa represents a true partnership between the banking and telecommunications sectors, and has the potential to make a positive impact on the lives of many Sudanese. Zain has cooperated successfully with the Bank of Khartoum for many years, and our mutual understanding and support has led us to being able to offer this much needed mobile banking service together.”

The mobile market in both Sudan and South Sudan is dominated by Zain and South Africa’s MTN. In July subscription losses caused Zain’s market share to drop; MTN by contrast reportedly had a good first half year in Sudan, with subscriptions increasing by 1.3% to 8.8 million.

David Okwara

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