Cash in hand: why Africans are banking on the mobile phone
Thursday, June 19, 2008
For consumers in developed markets, using a mobile phone for banking services is a smart add-on to a bank’s branch network. But to people in the developing world, the arrival of mobile banking – or m-banking – is potentially revolutionary.
If money is an economy’s lifeblood, improving its circulation plays a critical role. Many Africans living in rural areas, for instance, rely on money sent home by members of their family who work in towns and cities. But getting that cash to a village that could be hundreds of miles away is a tricky business. In Kenya, for example, workers in urban areas hand wages over to bus drivers, who promise to stop off at the worker’s home village en route to their destination.
Even those who do have a bank account – and they make up only a few per cent of Africa’s 950 million population – are restricted in what they can do with their money because of the dearth of branches in rural areas.
But the dramatic growth in mobile phone use in Africa – phones now outnumber cash machines by several thousand to one – is paving the way for a new set of services that turn the humble handset into a banking tool with the potential to transform Africa’s economy.
