Banking penetration in Gabon increases, following new cash transfer options

Mobile money has been a hot topic since Kenyan mobile operator Safaricom launched its M-PESA money transfer system in 2007. The initiative subsequently saw astonishing success, and now by some accounts is responsible for cash transfers equivalent in volume to roughly one-third of Kenya’s GDP. However, replicating that immediate success elsewhere in Africa has not been quite so easy, although the longterm prospects are certainly encouraging.

Jumping In

Since 2012 four mobile money services have been launched in Gabon. Network operator Airtel in 2012 became the first firm to launch a mobile money service in the country, partnering with BGFIBank Gabon and later adding Ecobank to its network. Later the same year Banque Internationale pour le Commerce et l’Industrie du Gabon (BICIG) became the first and as yet only bank in the country to launch its own proprietary mobile money service, while Gabon Telecom followed in 2013 with the launch of its Mobi Cash programme, in cooperation with Indian firm Mahindra Comviva. In 2014 UAE mobile operator Etisalat, which controls Gabonese network Moov, became the latest entrant to the market when it announced the launch of its Flous mobile wallet service in Gabon, in partnership with Orabank.

In the relatively short time since their launch such services have seen modest success, in particular in light of relatively low banking penetration rates. Only 6.6% of the adult population had a mobile banking account as of 2014, and 17.7% of people who had an account at a formal financial institution used a mobile phone to make an account transaction, according to Global Findex. Only 1% of the adult population used a mobile phone to make a utility bill payment in 2014.

Branching Out

Mobile money services continue to develop and expand. For example, in August 2014 Airtel and BGFIB ank announced a partnership allowing BGFIB ank customers to use Airtel’s mobile wallet and payment service, Airtel money, in four countries in the region, including Gabon. In addition to allowing customers to transfer money between Airtel and BGFIB ank accounts and check their bank account from their mobile, the agreement also lets customers withdraw cash from BGFIB ank ATMs without a bank card, as well as access international money transfer services and even mobile loans. In March 2015 local money transfer and exchange company e-Doley Finance was also reported to be planning to enter the mobile payment segment.

The number of major companies accepting mobile payments is also growing. In February 2015 local utility firm Société d’Energie et d’Eau du Gabon announced plans for a service that will allow customers with prepaid electricity meters to top them up via Airtel’s mobile banking service. This followed reports in November 2014 that cable television operator Canal+ would allow subscribers to pay for services via mobile payment networks. Mobile banking operators are also seeking to offer customers more traditional banking services. In March 2015 Airtel was also reported to be teaming up with Visa to offer Gabonese customers a debit card that could be used to make payments or withdraw money.

Looking Ahead

Bankers say the outlook for further expansion in the segment is good. “Mobile banking has strong prospects; however, the challenge is to increase activity by users,” said Christian Gondjout, director of strategy, development and projects at Banque Internationale du Commerce et de l’ Industrie Gabon, adding that of the 80,000 subscribers to the bank’s mobile platform only 20,000 were active users. He also told OBG, “Part of the problem is competition from other forms of payment. Nevertheless, we are very confident that mobile banking will have a major impact on the sector and banking penetration. There remains a need for greater investment and communication in the segment, but it is less costly than other means of expanding access to banking.”