Mobile Money in Sub-Saharan Africa and Its Implications

Abstract

On the African continent, the usage of mobile money, an innovative, new form of financial service, is expanding rapidly. According to the World Bank’s,1 Global Findex Database 2014, 13 countries with the highest user bases in proportion to the population (>10%) were all located in sub-Saharan Africa. Mobile money, a typical model of FinTech industry, is regarded as a practical alternative to the classical banking system. Due to the minimal requirements for its financial service infrastructure, mobile money services are expanding rapidly across developing countries. The widespread usage of mobile money services in Africa is viewed as a meaningful progress in financial innovation in that the service was formed on the back of local demand. The companies distributing the service in this case took a bottom-up approach in developing the platform. The new service, now expanding from developing countries to well developed countries, shows how innovative solutions to a local problem could engender a completely new type of service that could be applied globally. Therefore, we need to assess the current usage pattern of the service and try to understand its impact on the consumer banking service in Africa and beyond.