1. Mobile Money Revolution in Africa: A Game Changer for Unbanked Populations?  
Ernest Amoabeng Ortsin (Legon Centre for International Affairs and Diplomacy)
Paper presented at the 8th Annual Conference on Regional Integration in Africa at Lome from July 3-4, 2017.

2. Presentation Outline Abstract Overview of Financial Inclusion in SSA
Mobile Money
Kenya M-Pesa Model
Mobile Money and Financial Inclusion
Conclusion

3. Abstract
The main objective of this paper is to analyze how the growth in the use of mobile money services in Africa is addressing the problem of financial inclusion.

4. Definition of Financial Inclusion -World Bank
“The proportion of individuals and firms that use financial services.”

5. Definition of Financial Inclusion - Center for Financial Inclusion (CFI)
“Access to a full suite of financial services including credit, savings, insurance, and payments” delivered on a platform that is “quality, convenient, affordable, suitable, and provided with dignity and client protection.”

6. Overview of Financial Inclusion
The World Bank’s Global Findex report (2014) indicates that an estimated 2 billion of the world’s adult population are without bank accounts. About 350 million of them, according to the report, are to be found in Sub-Saharan Africa (SSA).

7. Financial Inclusion Overview
Figure 2: Use of financial services is still very limited in emerging markets
Adults with an account at a formal financial institution, %
High-income
Economies
E. Asia and Pacific
Global
EM Europe and C. Asia
Latam and Caribbean
S. Asia
SSA
MENA
Source: Global Findex database, Standard Chartered Research

8. Reasons for not Accessing Banking Services in SSA
Figure 1: Reported reasons for not having a bank account
Adults without an account, %
Not enough money
Family member already
has an account
Too expensive
Too far away
Lack of documentation
Lack of trust
Religious reasons
Note: Respondents could choose more than one reason. Source: Global Financial Inclusion (Global Findex) Database, World Bank, Standard Chartered Research.

9. Mobile Money
According to the Global Findex (2014) 12% of adults in Sub-Saharan Africa (SSA) on the average have mobile money accounts. This is the highest in the world against a global average of 2%. In Tanzania for example, about 17% of adults had accounts in 2011 but this increased to 40% in 2014 as a result of mobile money accounts. Across the SSA region about 45% of people have only mobile money accounts and no financial institution account.

10. At the time of the deployment of M-Pesa, only about 20 per cent of Kenyans had bank accounts and could be described as being financially inclusive. A decade later, about 93% of Kenyan adults have access to mobile money accounts. Presently, an estimated 40% of Kenyan gross domestic product (GDP) passes through M-Pesa on daily basis.

11. Critical Success Factors for M-Pesa
Regulatory Framework
Domestic Remittances
2008 Post-Electoral Violence
Variety of Services
Smart phones

12. Replication of M-Pesa Model

13. Advantages of Mobile Money
Fast
Convenient
Simple
User-friendly
Ubiquitous

14. MOBILE MONEY AND FINANCIAL INCLUSION
Treasury Bills
Interest Earnings on Mobile Wallet
Insurance
Loans
Remittances from abroad
Cross border Transactions

15. Challenges Internet Connectivity Charges Amount Restrictions
Theft /Fraud

16. CONCLUSION
The revolution in mobile money brings to the fore two critical questions. Looking at the catalytic role credit cards have played in the economies of advanced countries, and with the hope that Africa was eventually going to follow suit, questions are now being asked about whether Africa would undergo the same trajectory? Also, what becomes of the future of traditional brick and mortar banks? Will they collapse under the weight of the competition from mobile money?

17. Thank You