TALKING
‘‘ business
Africa , a continent where only 48 % of the population has access to traditional banking services , has emerged as a global leader in mobile money solutions , constituting 70 % of the world ’ s $ 1 trillion mobile money market . What began in Kenya in 2007 as a revolution to address the unavailability of traditional banking services , has now become the most preferred medium for transactions in over 96 % of households in Nairobi , impacting lives and economies one mobile money transfer at a time .
The relevance and usage of these solutions grew significantly over the years , with Africa hosting over 166 live mobile banking services , and 763 million registered accounts that facilitated 44.9 billion transactions worth $ 836.5 billion in 2022 . By offering vital services such as basic Peer-To-Peer , P2P money transfers , savings , loans , and insurance , these solutions addressed critical issues for the underserved and unbanked population across the continent .
SME opportunity
In Africa , Small and Medium Enterprises , SMEs play a vital role in driving economic growth and job creation , consequently contributing to around 80 % of jobs across the continent . Nevertheless , accessing traditional financial services often remains a challenge for these entities , significantly slowing down their progress . In such cases , mobile money solutions came up as vital drivers of growth , empowering these enterprises and propelling their development .
Having navigated through their early stages with the help of mobile money solutions , SMEs are able to win the trust of traditional financial institutions . With increased credibility , they are then able access additional funding for further expansion , cementing their position as vital drivers of economic growth at the grassroots level .
The pandemic played a massive role in enhancing the popularity of mobile money solutions and reaffirming their unique advantages . According to reports , postpandemic , the reliance on mobile money solutions shot up remarkably to 84 % of the population in Kenya , 70 % in Somalia , and 60 % in Nigeria , underscoring the significance of the solution in the continent ’ s economic landscape .
Leveraging telecom platform
Eric Karobia , CEO Whizmo
Mobile money solutions have been able to expand the reach of SMEs through digital payments , making it possible for them to attract a much larger customer base . This also includes a large percentage of the population that may not have access to traditional banking services .
A vital contributor to the success of mobile money solutions in Africa much before they became relevant and used across the rest of the world was the indepth understanding of the unique dynamics of the local market .
As a result of tapping into these markets , SMEs were able to increase their sales , revenues , and drive the overall progress of their business . While gaining access to loans continues to serve as a necessity for the growth and development of SMEs , mobile money does iron out a lot of other hurdles .
The active adoption of digital payments amongst SMEs has dramatically improved their efficiency . This became a reality not only because of the fact that this new medium of receiving money minimised the risks and hassles related to dealing with larger amounts of physical cash , but also because it provided them with improved transparency , and a lot more control over their money .
By carefully analysing the infrastructure available , mobile money service providers customised their strategies , offerings , and mediums of providing their solutions to easily integrate with the existing resources , while effectively catering to the needs and wants of the people .
Over 17 years ago , when Internet connection and smartphones were rare , telecom service providers took advantage of the wide-spread availability of feature phones and SIM cards to offer their solutions via SIM Menu or Unstructured Supplementary Service Data , USSD .
As a result , a significant percentage of users could easily pay for their child ’ s school fees , house rent ,
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