GSMA names Kenya as a global leader in mobile money

Visa Card’s Dougie Henderson (left), Airtel boss Shivan Bhargava and Chase Bank deputy CEO Paul Njaga (right) during the launch of a joint mobile money debit card at the Panafric Hotel in Nairobi February 20, 2014. Photo/SALATON NJAU 

 

By JAMES KARIUKI
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Kenya is a global leader in mobile phone-based cash business, holding a third of the world’s 61 million mobile phone-based money accounts.

The GSMA, an association of mobile operators, in a meeting in Spain Tuesday released a statement saying the number of the unbanked poor had benefited immensely from continued growth in mobile phone-based financial services pioneered by Safaricom.

“At the end of 2013, nine markets — Cameroon, the Democratic Republic of Congo, Gabon, Kenya, Madagascar, Tanzania, Uganda, Zambia and Zimbabwe — had more mobile money accounts than bank accounts, compared to just four markets last year,” the GSMA said.

In its third annual Mobile Financial Services State of the Industry report, the association said the number of active mobile money users continues to grow rapidly, with more than 61 million accounts active as of June 2013, compared to 37 million in June 2012.

“Further, the number of registered mobile money accounts nearly tripled from 71 million in June 2011 to 203 million in June 2013.

Services have expanded across a greater number of regions, with 219 services in 84 countries at the end of 2013, compared to 179 services in 75 countries at the end of 2012,” it said.

The majority of services remain in sub-Saharan Africa, with 52 per cent of all live mobile money deployments located in the region. However, mobile money is also expanding outside of the region. For example, 19 mobile money launches are planned in Latin America.

The growth was attributed to favourable regulatory reforms that are enabling mobile money services contribute to the growth of industry

.

“Each year our review reveals greater insights on the wide range of uses of mobile money and on how operators are working collaboratively in developing mobile money services to meet growing customer demand,” said GSMA chief regulatory officer Tom Phillips.

In Kenya, use of the mobile mobile platform could further strangle cash inflows into Kenyan banks from foreign banks after M-Pesa signed an agreement with US-based money transfer company MoneyGram allowing its 334,000 agents to send money to through M-Pesa network that currently boasts of 21 million account holders.

The report noted that an increasing number of providers are overcoming operational challenges to create solid distribution networks and a large base of active customers with 13 of the leading mobile operators serving more than million customers each.

Introduction of new products such as bulk payments and merchant payments has helped spur the services even in remote areas.

The development of other mobile financial services, including 123 mobile insurance, mobile credit and savings services —27 of which were launched in 2013 — will allow service providers to deepen financial inclusion by offering financial services beyond money transfer and payments.