DAKAR: When farmer Isaac Tondo fell on lean times in Liberia’s long rainy season, his brother in the capital sent 8,000 Liberian dollars (US$87) to his Lonestar mobile money account, ensuring his children’s school fees would still be paid.
Across Africa more and more people — from urban start-ups to hard-up villagers — are now spending, saving and planning for the future through banking services offered by mobile phone companies. And experts believe growth and poverty reduction will follow, if certain key risks are managed.
Tondo’s brother used to entrust cash with contacts passing through their home village in Grand Gedeh county, but the roads are so bad they can no longer access it.
“The only means of receiving money from Monrovia is through mobile money,” the farmer told AFP. Collecting and depositing cash at omnipresent kiosks and sending money via text message has fast become the natural solution in African nations where distances are often long, roads and infrastructure poor, and few have access to traditional bank accounts. Africans are “leading in the world” in their uptake of mobile banking services, Mitsuhiro Furusawa, Deputy Managing Director of the IMF told AFP at a recent conference on promoting access to financial services in Dakar, Senegal.
The IMF has said the potential for further financial development is “substantial” on the continent, and that wider access to banking services could unlock an additional 1.5 percent in annual growth. Payment systems such as Orange Money in west Africa, M-Pesa in Kenya and Tigo Cash, used in several nations, have become incredibly popular in recent years in sub-Saharan Africa, where the vast majority lack physical or financial access to traditional banking services.
Around 11 percent of Africans now have a mobile banking account, according to the IMF, rising to 60 percent in Kenya. The average figure for the rest of the world is two percent. While Kenya, Tanzania and Uganda lead the way in east Africa, Ivory Coast is the bright spot in the west of the continent, where 25 percent of the nation uses such services.
SOURCES: News Now/Daily Times