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China-Africa Trade Information Service
Image from Phnom Penh Post
Mobile money provides non-bank accounts with some financial services through mobile digital platforms, including: mobile remittances, mobile payments and mobile banking.
Mobile money enables anyone with a phone and a SIM card to complete basic financial transactions such as savings and transfers without having a bank account. The model was pioneered in East Africa, most notably by Safaricom’s M-Pesa in Kenya, and has quickly spread to other parts of the developing world. It usually involves the agent banking model, a network of agents with kiosks who can reach far-flung rural populations at a lower cost than brick-and-mortar banks.
The mobile money sector in Southern Africa is, in general, less mature than in Eastern Africa, particularly when compared to Kenya, the pioneer of mobile money. In Zambia, Malawi, and Mozambique, an average of 23% of the population holds a mobile money account, compared to 73% of the population in Kenya. In total, there are around 19 times as many mobile customers in East Africa compared to Southern Africa. However, the growth rate in Southern Africa, measured by number of new mobile money accounts, is twice as fast, with 29% year-on-year growth in 2015-2016. Opportunities for the development of mobile money in Southern Africa abound as the market starts to mature.
Mobile money services in Southern Africa have been championed by mobile network operators (MNOs) including Airtel, MTN, and Vodacom.
Recognizing the opportunity that this model of banking presents, traditional banks in the region are also entering the market through the agent banking channel, building agent networks to serve more customer segments and reach greater geographical areas. For example, Zanaco in Zambia launched an agent banking model called Xpress in 2017, and Opportunity Bank Malawi announced in 2016 that it would reduce brick-and-mortar bank services to focus on agent banking.
A third type of non-bank financial institution is independent of MNOs and traditional banks. For example, Zoona is focused on mobile money, operating in Zambia and Malawi.