Tuesday
July 10
2018

An Isolated Country Runs on Mobile Money

By Matina Stevis-Gridneff
Hyperinflation and economic isolation have pushed this poor, breakaway republic closer to a virtual milestone than most other countries in the world: a cashless economy.

Mobile-money services have taken off over the past decade in Africa; 1 in 10 adults across the continent—about 100 million people—use them. In Kenya, Vodacom Group Ltd.’s VOD -0.04% groundbreaking service M-Pesa, broadly considered the first major and most successful mobile-money technology platform, counts 26 million users, roughly half the population. More than half of the world’s 282 mobile-money platforms are in sub-Saharan Africa, research by McKinsey & Co. shows.

The continent, home to many of the world’s frontier economies, has come closest to skipping, or “leapfrogging” as it’s often called, traditional brick-and-mortar banks and going straight to heavily using phones as wallets.

And nowhere are the benefits of mobile money more apparent than in Somaliland, where the extreme economic and financial conditions have allowed Zaad, a service from the main local telecom, Telesom, to catalyze commerce in one of the most isolated parts of the world.

Photo courtesy of Scott Mainwaring.

Source: Wall Street Journal (link opens in a new window)

Categories
Inclusive Fintech
Tags
Africa, cashless, fintech, mobile banking, mobile finance, mobile money, telecommunications