The IMF told the AFP at a recent conference on promoting access to financial services in Dakar, Senegal, that Africans are “leading in the world” in their uptake of mobile banking services.
And according to Pakistan’s Daily Times, more Africans are using the banking services offered through mobile phone companies, and many experts believe that this trend will reduce poverty. Those using mobile services are not just those in urban areas; people in remote villages are also using mobile services.
In many areas, the roads are in such poor condition that contacts who carry cash to villages are unable to reach many of the rural inhabitants. Cash deposits are therefore made at kiosks, and money is sent via text in many areas by those who have no access to traditional bank accounts.
Mitsuhiro Furusawa, deputy managing director of the IMF, told AFP that the potential for financial development in Africa is “substantial” and that wider access to banking services could stimulate an additional 1.5 percent in annual growth. Rural communities and women, in particular, are targets for improvements in financial services.
Orange Money, M-Pesa and Tigo Cash are already widely used in sub-Saharan Africa. The IMF reported that 11 percent of Africans and 60 percent of Kenyans have a mobile banking account. The global average figure is 2 percent.
According to Jean Marius Yao, president and director general of Orange Money in Ivory Coast, Africa’s enthusiastic adoption of mobile banking has evolved from a simple way to transfer cash into an entire parallel system of micropayments of everything from saving accounts to business loans.
Roger Nord, deputy director of the IMF’s African Department, explained the link between financial development, economic growth and poverty reduction. For example, Kenya’s M-Pesa supports livelihoods by providing access to medical insurance, bill payments and small business loans to those who would be excluded otherwise. More