Africa’s mobile money market to hit $14b by 2020
•GSMA sees 80% of SSA populations’ have mobile access
With the world home to about 271 mobile money services, and more than half of them found in the sub-Saharan Africa region, by 2020, the continent’s mobile money market is expected to top $14 billion.
According to The EastAfrican, this is a revolution that is emerging in financial services, which has been propelled by digital technology.
It stressed that the benefits of this revolution ripple far and wide, beginning with customers, adding that people without access to formal financial services lead quite complex financial lives, with multiple sources of income and intricate networks for borrowing and lending.
The report noted that all of this is done in cash, which is quite expensive to use. It stressed that informal couriers and lenders charge exorbitant amounts, and something as simple as paying a bill can mean travelling for miles and waiting in line for hours. It’s almost like living every day under a tax — the “poverty tax.” This “tax” is greatly reduced when people are able to manage their assets with a formal service, such as a digital wallet. They can make payments; build savings and direct money for specific purposes much more easily.
A recent study in Malawi illustrates how much impact that can have. Already, the Global System for Mobile telecommunications Association (GSMA), an industry organization, for mobile network operators, estimates that 80 per cent of the population in SSA will have mobile access in the next five years.
As such, using mobile signals, providers can therefore bring digital financial services to millions of people that brick-and-mortar services simply could never reach.
GSMA stressed that digital also cuts the cost of transactions by as much as 90 per cent, allowing providers to charge extremely low fees, adding that with millions of customers making daily transactions, these small fees can add up to a sizeable profit.
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