Where are Mobile Financial Services in Africa?

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State of mobile financial services and regulation survey for the African Mobile Phone Financial Services Policy Initiative (AMPI) 2014 Meeting.

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Where are Mobile Financial Services in Africa?

  1. 1. Where are Mobile Financial Services in Africa? John Owens, Senior Policy Advisor Digital Financial Services, 05 February 2014 @NewsAFI | #AMPI2014
  2. 2. Number of Mobile Money Deployments Source GSMA MMU 2013 Global Mobile Money Adoption Survey
  3. 3. Map of Mobile Money Service Providers Globally Source GSMA MMU 2013 Global Mobile Money Adoption Survey
  4. 4. Countries with more mobile money accounts than bank accounts and more mobile money agents than bank branches Source GSMA MMU 2012 Global Mobile Money Adoption Survey
  5. 5. Partnership as a driving force of Financial Inclusion Financial Inclusion
  6. 6. Mobile Money Supporting Financial Inclusion in Other Ways Percentage of adults using a bank account 2006 13% 2012 4 Million 20 Million bank accounts bank accounts 24 Million registered mobile money users 29% 5 5 5 5 5
  7. 7. The Case of M-Shwari
  8. 8. Small Value and Credit Savings M-Shwari, a savings and credit product from Safaricom and Commercial Bank of Africa (CBA) has registered a phenomenal uptake. The product enables M-PESA subscribers registered for at least 6 months to get a loan, anywhere from $1.15 to $235 for a 30 day term instantly into their ewallets.
  9. 9. Preliminary Results: Policy Profile Questionnaire
  10. 10. Policy Profile Questionnaire • Covered 4 policy areas: Financial Inclusion Data, Mobile Financial Services, Financial Integrity, and Consumer Protection • Questionnaire sent to 29 African countries and BCEAO totaling 37 countries. • Angola, Burundi, Cameroon, Cape Verde, Central Africa Republic, Chad, DRC, Egypt, Gabon, Gambia, Ghana, Guinea, Kenya, Liberia, Madagascar, Malawi, Morocco, Mozambique, Namibia, Nigeria, Rwanda, Sao Tome and Principe, Sierra Leone, South Africa, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe and BCEAO (Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal, and Togo). • 10 countries and BCEAO have responded. The respondents altogether represent 18 countries (49%).
  11. 11. Is there an enabling law, such as an NPS Act, which gives the financial regulator clear authority over payment services including MFS? Guinea No 6% 94% Yes Uganda Burundi DRC Kenya Namibia Nigeria Rwanda Zambia BCEAO Tanzania Almost all respondents have the clear legal mandate to regulate MFS.
  12. 12. Are there existing category of account, other than deposit accounts, in which client funds are repayable on demand and which may be issued by banks and/or non-banks? The vast majority of respondents appears to allow both banks and nonbanks to issue e-money. Guinea 0% 6% No Zambia 6% Non-banks New policy areas will be added as fresh evidence emerges. Both banks and non-banks 88% Burundi DRC Kenya Namibia Nigeria Rwanda Tanzania Uganda BCEAO
  13. 13. Are both bank and non-bank payment service providers allowed to appoint agents to provide cash handling services, on the same terms and conditions? Burundi Guinea Uganda DRC Kenya Namibia Nigeria Tanzania No 17% Different terms Equal terms 55% Rwanda Zambia BCEAO 28% The industry appears to be moving towards a level playing field with regards to agents.
  14. 14. Which types of entity may serve as agents for financial service? DRC Kenya Namibia Nigeria Tanzania Uganda BCEAO Any legal 12% person Rwanda Zambia Any legal person meeting minimum requirement 88% Minimum requirements for agents are the norm. Responses based on 16 countries that have agents
  15. 15. Are exclusive contracts between financial institutions with agents allowed? DRC Kenya Nigeria Tanzania Uganda Zambia BCEAO Yes 12% Namibia Rwanda No 88% The trend appears to be to prohibit exclusivity of agents, especially in the most advanced mobile money markets. Responses based on 16 countries that have agents
  16. 16. Is remote account opening (such as over the air on a mobile device) allowed for transactional accounts? Guinea Namibia Uganda Zambia BCEAO Yes 29% DRC Kenya Nigeria Rwanda Tanzania No 71% The majority do not allow remote opening of accounts but most of the fastest growing markets & national IDs do allow this.
  17. 17. Are payment service providers required to receive customer complaints and enquiries at all times and have to respond within a specified window? Guinea Namibia BCEAO Yes No 59% 41% DRC Kenya Nigeria Rwanda Tanzania Uganda Zambia There is scope for improvement on consumer protection
  18. 18. Does your law, regulations or guidance allow for risk-based simplified CDD where in relation to specific low-risk products and services? Burundi Guinea Kenya Rwanda Tanzania Uganda Namibia Nigeria Zambia BCEAO DRC No 33% Yes 67% While the majority of countries in the survey do now allow for risk-based simplified CDD, many are still working on regulations.
  19. 19. What types of low-value products qualify for simplified CDD in terms of the country’s AML/CFT framework? Percentages* of countries with simplified CDD, by product types 9% Micro-insurance products 82% Prepaid cards Low-value mobile-money single transactions 18% Low-value single transactions 18% 100% Basic mobile money accounts 27% Basic bank accounts 0 20 40 60 80 * The denominator is a number of countries that allow risk-based simplified (=11 countries) 100
  20. 20. AMPI Stock-Taking: Regulatory Environment of MFS in Africa
  21. 21. Measuring Access & Usage of MFS Dimension Definition Indicators Ability to use formal Number of MFS cash points per 10,000 adults Access financial services, i.e. Number of MFS cash points per model minimal barriers to % of Relevant administrative units with MFS cash points opening an account - Physical proximity % of active MFS cash points - Types of services Average number of MFS types offered by MFS deployment Usage Actual usage of financial services / products - Regularity - Active vs. Registered % of adults with at least one MFS account Proxy: # of MFS Accounts per 10,000 adults Proxy: # of MFS accounts per 10,000 adults by deployment % active MFS accounts % active MFS accounts by deployment Total Value in US$ of MFS transaction monthly for all MFS deployments Ave. # of MFS transactions per active MFS cash points monthly
  22. 22. Thank you! info@afi-global.org www.afi-global.org

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