Business
Impressive growth of mobile banking (M-Pesa) spawns renewed interest in Africa’s banks
The mobile phone has entirely changed the story of banking in Africa. Today a cellular phone is an all-purpose bank account, an Automated banking machine (ABM/ATM) and an Electronic funds transfer (EFT) gadget all rolled into one.
In 1998 Africa had less than 2 million mobile phone subscribers. By 2011 and the number had risen to over 500 million cellular phone subscribers making it, according to the International Telecommunications Union (ITU) as the region with “the highest growth of mobile phone usage in the world”.
According to the World Bank, Nigeria, South Africa, Kenya and Ghana are the biggest mobile phone markets in Africa today. Kenya, Tanzania, Uganda and Rwanda currently have a combined active mobile subscriber base of 69.4 million. Of these, Kenya leads with 29.2 million subscribers. Tanzania comes second with 21.2 million followed by Uganda (14.7 million) and Rwanda (4.3 million) subscribers.
However, and in direct contrast to the mobile market, East Africa as a whole has a total of 14.5 million bank account holders out of a population of 120 million. This supports the position held by the African Development Bank (AfDB) that much of Africa’s population remains largely unbanked.
According to Peter Ondiege, the Chief Research Economist at AfDB, only 20 percent of African families have a bank account.
This is, however, changing rather fast with mobile phones opening a new frontier in banking services. “Given the successful stories in Kenya and South Africa, m-banking services are likely to reduce, by more than half, the number of the unbanked African population,” says Ondiege.
One of the major factors contributing to the growth of cellular phone usage in Africa has been attributed to mobile money. The numbers tell it all. The M-Pesa platform (mobile money transfer platform), which is popular in East Africa, is testament to this fact. Eight months after inception in 2007, M-Pesa had registered some 1.1 million subscribers and transferred US$87 million. By September 2009, M-Pesa system handled US$3.7 billion in transfers and its subscriber base had swelled to 8.5 million. It is expected that the M-Pesa platform US$8 billion in 2012.
Globally, according to the World Bank, there are 60 million mobile money users in the world. Of these, according to the Communications Commission of Kenya (CCK), the country’s mobile money subscriptions stand at 18.9 million. This means that Kenya controls 31.5 percent of the global mobile money market.
