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Research shows PoD solutions financial inclusion across Africa


Research has revealed that giving people the ability to pay only for what they use, as they need it, can lift millions of people across Africa out of poverty and make prosperity possible.

According to a White Paper, titled: ‘Pay on demand: The digital path to financial inclusion’, prepared by Mastercard, it explored how digital inclusion has been proven to provide better access to financial and other services. This ultimately drives financial inclusion, which leads to improved economic possibilities for individuals and businesses.

The report, based on research from in-depth face-to-face interviews with consumers across Nigeria, Kenya, and Uganda, showed that a focused deployment of solutions like Pay on Demand is key to increasing connectivity.


However, for these solutions to function effectively, it is critical that all stakeholders – governments, Mobile Network Operators (MNOs), financial service companies and regulators – come together to unlock opportunities to enable greater financial inclusion.

The report noted that technology and connectivity enabled by MNOs initially made digital inclusion possible; however, mobile devices became a viable instrument of digital inclusion when prepaid plans allowed individuals to recharge for as low as 10¢ at a time.


Currently, the report noted that prepaid connections are at 98.8 per cent in Kenya, 97.5 per cent in Nigeria, and 99.1 per cent in Uganda with smartphone penetration in Africa projected to reach 66 per cent by 2025, up from 36 per cent in 2018.

Pay on Demand (PoD), according to the Mastercard report applies the same principle for goods ranging from mobile phones to solar panels, water filters or laundry machines. The model, often underpinned by the Internet of Things (IoT), further bridges the ownership divide by providing affordable services and assets, driving the next wave of inclusion by keeping people connected.


Executive Vice President, Digital Solutions, Mastercard, Jorn Lambert, said: “The growth of digital technology has presented people in Africa with access to innovative, affordable solutions that help them meet their basic needs, ultimately leading to greater access to capital that can scale businesses and increase prosperity. The Pay on Demand model is an incredible example of this, which has already empowered millions of people by making solar energy more accessible and affordable.

“But now, with the expansion of Pay on Demand to any connected device like smartphones, water filters or white goods, we have a real opportunity to positively impact the lives of a billion people, in the same way, the telecoms industry did two decades ago. To further scale the model effectively and create a digital economy that works for everyone, key players in the ecosystem must collaborate to drive a new wave of inclusion through connectivity and smart devices.”


The White Paper observed that by giving customers the flexibility to pay for services via their mobile phones on terms that work for them, PoD business models resolve real pain points.

“This can be the difference between being able to switch on electric lights in a home, and an entire family living with paraffin fumes from a single lamp. The need for off-grid solar lighting products is particularly prominent in Sub-Saharan Africa. Sales of off-grid solar lighting products topped 2.25 million (937,618 through Pay on Demand) across the region between January and June 2019, higher than any other region in the world.


“In all three countries where users were surveyed, access to basic necessities was the number one driver of Pay on Demand use, with electricity top of mind for all users. The main aspirational products acquired through Pay on Demand were digital TVs, followed by smartphones. These assets are vital to connecting people to the larger world, whether it’s by powering electric devices or having internet access so a child can do their homework,” it stated.

The report noted that though smartphones are highly coveted through PoD, the desired price for them amongst users differs across all three markets. It is $200 – 250 in Uganda; $55 – $110 in Nigeria; and $100 – $250 in Kenya.

Mastercard’s research also shows the far-reaching impact of Pay on Demand. “We were touched by the emotional benefits that switching on a light can bring or the dignity that comes from having a phone that is always charged. As the Pay on Demand model scales, more consumers will gain access to useful products that support happier, healthier lives as well as financial services to secure their future,” Lambert added.


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