World borrows a leaf from M-Pesa as mobile money services spread
This is indicating that the mobile money sector is having a demonstrable impact on the effort to extend access to financial services and to provide a gateway to the digital economy.
“While mobile money providers may not currently have all of the in-house assets or enabling regulation required to provide customers with use cases beyond transactions, they can create a platform to facilitate this,” said GSMA in its report.
This has made Google Play as one of the first among global e-commerce sites to adapt to mobile money.
Half of mobile money users in the world are found in sub-Saharan Africa with Kenya taking the lion’s share, while Asia recorded the fastest year-on-year growth to grow to 34 per cent of all mobile money users in the world.
The report said that mobile money also makes good business sense, noting that shifting to digital salary payments saves time and costs for both employers and employees.
“In Kenya, more than 250 government services are now available digitally through the country’s e-government platform, e-Citizen. Over 90 per cent of all digital payments on e-Citizen are made through mobile money. This has significantly streamlined the collection process: it now takes just one financial day to complete collections, settlement and reporting, down from six months before 2014,” the think tank stated.
GSMA director general Mats Granryd said mobile technology is also proving to be an essential tool for delivering on the highly ambitious Sustainable Development Goals (SDGs) now in their third year.
He said better connectivity and new services are enabling healthier, more inclusive communities, and mobile money remains a central part of this story.
“It is contributing to 13 of the 17 SDGs, from enabling access to essential services like health and education, to empowering women with employment opportunities, to reducing poverty by offering life-enhancing financial services, often for the first time,” said Mr Granryd.
The report indicated that for providers of digital financial services, mobile money can be a gateway into huge and largely untouched markets.
“Digital finance has the potential to reach over 1.6 billion new retail customers in emerging economies and to increase the volume of loans extended to individuals and businesses by $2.1 trillion,” the report said.
It goes further to state that the providers of these products stand to gain by access to potential new revenue streams and to increase their balance sheets by as much $4.2 trillion, in aggregate.
In 2016, Massachusetts Institute of Technology economics Professor Tavneet Suri released the results of a study on the financial and social impact of Kenyan mobile services since 2008, showing that it had lifted two per cent of the population from poverty.