Mobile money usage drives financial inclusion in Rwanda and Ghana

A new report has provided some insights into how mobile money services in Ghana and Rwanda are providing formal financial services for the first time to people in rural areas or living on less than $2.50 (€2.28) per day.

According to new surveys on financial inclusion funded by the Consultative Group to Assist the Poor (CGAP), 17 per cent of adults in each of the two markets in Africa have active mobile money accounts. Interestingly, 61 per cent of active mobile money account holders in Rwanda are located in rural areas, while 72 per cent live on less than $2.50 per day.

In cases such as these, CGAP noted that mobile money is proving to be the first route towards financial inclusion for many adults. The group added that while Kenya and Tanzania have previously been lauded as mobile money success stories, the survey demonstrates that new technology can also be effective in other African markets.

In Ghana, for example, rural access has doubled since 2010. In Rwanda, people living below the poverty line are more likely to be active mobile money users than those with higher incomes.

Claudia McKay, senior financial sector specialist at CGAP, said: "There is a ripe market for products that make it easier, faster and cheaper for people to conduct financial transactions. Now it's a matter of designing products that fit into the everyday lives of people, especially the poor, and that have a strong business case for providers."

CGAP added that continued progress toward financial inclusion in Ghana and Rwanda hinges on what happens with mobile money. "There is significant momentum behind mobile financial services in both countries," the group added.

In Ghana, CGAP said the underlying conditions for mobile money are excellent, and noted that new regulations passed in July 2015 have made it easier for mobile money service providers to operate. The remaining challenges are customers' persistent reliance on cash, especially for paying bills, CGAP added.

Vodafone also recently revealed that it had launched the M-Pesa mobile money service in Ghana.

In Rwanda, on the other hand, phone ownership and comfort levels with mobile devices remain a hurdle, but customers are already in the habit of paying bills with mobile money. "With an improved mobile network, digitizing additional payment streams is a significant opportunity," CGAP said.

CGAP also carries out financial inclusion surveys in Kenya and Tanzania, where more people have mobile money accounts than bank accounts. Indeed, 58 per cent of adults in Kenya have active mobile money accounts compared to 28 per cent with bank accounts. In Tanzania, the respective percentages are 34 per cent and 21 per cent.

For more:
- see the CGAP release
- see the CGAP survey data

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