The growth of mobile financial services in Africa is having an undeniable impact across the continent, and Ghana is no exception. The ability to transfer money via mobile phones enables migrants who have moved to urban centres for work to send remittances to relatives still living in remote rural areas absent of any sort of bank or financial institution. In a region where mobile technology is far more accessible than fixed lines, and where an overwhelming majority of the population remains outside the formal banking sector, providing financial services via mobile telephony has enormous potential for growth.
The popularity of mobile banking in other African markets as diverse as Kenya, Gabon and Algeria – where over half of the adult population report using mobile banking services, according to World Bank data – highlights the segment’s potential.
EASY MONEY: In Ghana, MTN, which has mobile money services on offer throughout the continent, was the first to enter the fray in 2009. The firm has already amassed more than 2m registered subscribers, although only an estimated 80,000 are regarded as active. “Mobile money in Ghana is still in the early adoption stage and it requires huge efforts in educating customers on how to use the services and how they can benefit,” Ebenezer Asante, a sales and distribution executive at MTN, told OBG. “However, our experience has indicated that once people begin actively using mobile money services, they rarely stop.”
Other operators followed suit in 2010 with the launch of Airtel Money (previously known as Zap) and Tigo Cash. Airtel was the first operator to provide clients with more sophisticated mobile banking services in addition to mobile money. Airtel Money allows customers to withdraw cash from ATMs by sending money from mobile wallets to selected ATMs where redeemable pin codes enable customers to make withdrawals without an ATM card. Bill payments, account top-up and retail purchases are all features commonly offered by operators. Both Tigo and Airtel have interoperability, allowing customers to send money across mobile networks. Meanwhile, Vodafone is set to roll out a mobile money platform by end-2012.
PARTNERING UP: All operators offering mobile money are required by the Bank of Ghana to partner with at least three banks. Third-party mobile money merchants must be authorised and trained by partner banks. Once authorised, merchants register clients by sending a photo of the customer and his or her ID card via phone or internet to operator servers for registration. Merchants then receive commissions from all transactions, essentially replacing the need for a local bank branch. As banks approve merchants nationwide, they are responsible for driving penetration throughout the country, not the telecoms operators.
The success of mobile money has also opened the door for other mobile financial services, such as mobile micro-insurance (see Insurance chapter). For less than $1 per month customers can purchase a basic life insurance plan through MTN, which operates the scheme known as Mi-Life in partnership with UT Life. Launched in July 2011, Mi-Life offers customers low monthly premiums that are automatically deducted from their mobile wallets each month, and payments are said to be made within 10 days of claims. “Just as with mobile money, mobile micro-insurance plans have enormous potential. The overhead is nominal and customers have been passing the information by word of mouth, in effect acting as de facto spokespeople for mobile life insurance,” said Asante.
GREAT POTENTIAL: Though mobile financial transactions are a tiny portion of the financial sector, like Ghana’s informal depositories call susu collectors, they provide a unique service to the unbanked segments of society, presenting a convenient way to draw consumers into the formal market. Though subscriber figures are still low, especially when compared to other African nations, it is still early for Ghana, and the potential to continue expanding existing mobile financial services, and create new ones, is immense.
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