Less than half of adults in Africa have bank accounts as limited access, high costs, and strict requirements have historically excluded many from formal financial systems.
Mobile money platforms such as M-Pesa – "currently Africa's largest fintech" – are changing this narrative, notes Diego Gutierrez, chief officer of international markets at Vodacom Group.
Over half of global mobile money accounts are in Sub-Saharan Africa, with $2.3 billion transacted daily, according to the GSMA.
Since its 2007 launch, M-Pesa has allowed millions to store, send, and receive money via mobile phones, providing financial access to those previously excluded, says Guiterrez. "The convenience, affordability, and widespread adoption of mobile phones have allowed mobile money to bridge the gap between the formal financial sector and the unbanked population.”
M-pesa's impact
The impact of mobile money platforms is greatest among people living in rural communities, those in lower socio-economic groups and historically excluded groups like women and people living with disabilities, says Guiterrez.
This is detailed in the Africa.Connected report on digital financial inclusion on the continent.
The research states that effective mobile money implementation can contribute to accelerated economic growth: “In action, these digital tools empower individuals to tap into funds to transform their lives, from furthering education to starting a new business. By facilitating financial transactions, mobile money has stimulated economic activity across various sectors, enabling businesses to operate more efficiently and reducing the reliance on cash-based transactions.”
Gutierrez highlights the success story of Amanya Kuchio, one of the founders of Nairobi-based errands and delivery company Femme Logistics. M-Pesa simplifies account monitoring for her business, providing better financial visibility and making bookkeeping easier when customers pay via mobile.
Her experience aligns with the Africa.Connected research, which found that M-Pesa boosts business growth by enabling faster payments and making online transactions easier, cheaper, and safer.
However, Gutierrez notes that challenges remain – restrictive regulations, increased taxes on devices and transactions, and low financial and digital literacy hinder mobile money's broader success. He urges collaboration between governments, regulators, and the private sector to create an environment that supports mobile money innovation.
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