Mobile money transfer more costly for the poor

The cost of mobile money transactions has pushed up the cost of doing business in Africa. GRAPHIC | NATION MEDIA GROUP 

In Summary

• Average cost of sending $1 is 9.5 per cent of the value of the transaction: Cost of sending $20 is 2.6 per cent.

By JAMES ANYANZWA
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Kenya is among the top five African countries in mobile penetration, even though the cost of mobile transactions remain high for poor households and businesses.

The cost of mobile money transactions has pushed up the cost of doing business on the continent.

A new report by Egyptian Investment Bank EFG Hermes shows that although financial inclusion has taken root on the continent, it has come at a huge cost to the consumers of mobile money services.

The report, Deepening Financial Inclusion, But at a High Cost, shows that Ghana has the highest rate of adult mobile penetration on the continent followed by Botswana, Kenya, Zambia and Nigeria.

Within East Africa, Kenya leads in terms of adult mobile penetration, followed by Tanzania, Rwanda and Uganda.

The report, which was released last month, shows that whereas there is improvement in the penetration of mobile banking across sub-Saharan Africa, transaction costs still remain high.