The linkage between commercial banks and mobile network operators in the developing world will continue to play a key role in bridging the financial inclusion gap, Safaricom CEO Bob Collymore has said.
Speaking when he chaired a panel discussion on Central Banking and Financial Inclusion during a symposium to mark the Central Bank of Kenya’s 50th anniversary, Collymore acknowledged that mobile network operators are providing complementary services to commercial banks, helping to accelerate financial inclusion.
In a clear case of a situational leapfrog due to technological ease, more and more developing world citizens are likely to access their first banking experience on their mobile phone handsets, than on a brick and mortar bank branch, Collymore said.
“As Africa’s smartphone penetration leaps to 50% by 2020, up from only 18% in 2015, we can expect access to financial services on mobile phones to make a corresponding leap,” he noted.
The ubiquitous mobile phone technology, he noted has given rise to a variety of solutions and innovations that allow consumers to conveniently access financial services from the palm of their hands.
Such access, he noted has had a domino effect on economic and social growth as individuals previously locked out of the financial ecosystem begin to enjoy the benefits of banking and credit access.
“Bank customers and mobile subscribers now have unprecedented, immediate access to their financial service products at any time and from anywhere. The result of this tsunami of innovation is unprecedented partnerships that aim to increase access to financial services,” said Mr. Collymore.
The East African region currently leads the world in mobile money accounts, with over 21 million people using their mobile phones to access basic financial services.
At the panel discussion featuring the Tanzania Central Bank Governor Benno Ndulu and his Rwanda counterpart John Rwangombwa, the Safaricom boss gave the firm’s example, confirming that its M-PESA platform remains a key avenue for deepening financial inclusion.
Through the M-PESA platform, which currently features more than 24 million customers, Collymore explained that an individual loan is processed every second through partnerships with banks on the mobile platform.
“In most instances, these are loans processed for subscribers who had no access to financial services before, sometimes operating in remote parts of the country,” he explained.
Over the last 9 years, Safaricom, he disclosed, has managed to achieve 92% penetration of adult mobile subscribers who have adopted and are using mobile money services, with an average of 11 million transactions a day on the service.
To further enhance financial inclusion, Safaricom, he said, hopes to expand the availability of mobile money services to more customers by partnering with more third parties including banks while supporting ongoing financial literacy initiatives.
Last year, M-PESA generated Kshs 41.5 billion in revenue representing a growth of 27% from the previous year, a growth that was attributed to an increase in 30-day active M-PESA customers to 16.6 million up 20% and a 16% increase in chargeable transactions to 7.4 per active customer from the previous year.
M-PESA, he said continues to be a key financial inclusion platform for Safaricom and will continue to be deployed in the provision of savings and loans products while growing its capacity to facilitate cashless payments.
M-PESA continues to support financial inclusion initiatives with the growth of savings and loans through the M-Shwari and M-KCB platforms in partnerships with CBA and KCB banks respectively. The two platforms continue to offer customers more options and convenience when accessing credit.
M-PESA subscribers also enjoy unrivaled convenience when sending and receiving money through international partners.
Safaricom has partnered with a number of international parties such as Moneygram to facilitate international money transfer solutions for its subscribers’ on the M-PESA platform. Last year, international money transfers via M-PESA grew by 64% to Shs 13.1 billion.