Promote mobile banking like Kenya, report urges African states

[Ab-Titchaz]

Promote mobile banking like Kenya, report urges African states

Safaricom M-Pesa menu showing the Pay bill option. November 28, 2012. PHOTO | SALATON NJAU

By JOSHUA MASINDE

[h=3]In Summary[/h]

• A study released in March this year by the Financial Access Partners indicates that Kenya is the most financially inclusive country compared to many other African countries.
• The survey shows that 77 per cent of Kenya’s population has access to financial service points within 5-km radius. Tanzania has 35 per cent of its population accessing financial services points within 5km while Uganda has 43 per cent of its population accessing financial points within the same distance.

A new report has urged African governments to emulate Kenya in supporting the development of mobile banking and electronic commerce to increase financial inclusion.

The Africa Progress Report 2014, released last week, says the success of the M-Pesa mobile payment platform has greatly enhanced financial inclusion in Kenya.

“African governments can also support the development of mobile banking and e-commerce to overcome financial exclusion, building on successes such as M-Pesa in Kenya. Development finance institutions should work with the private sector to foster more balanced perceptions of risk,” said the report released at the World Economic Forum in Abuja, Nigeria.

It says Africa’s growth has largely been constrained by low levels of access to formal financial systems.

“Only one in five Africans have any form of account at a formal financial institution, with the poor, rural dwellers and women facing the greatest disadvantage. Such financial exclusion undermines opportunities for reducing poverty and boosting growth that benefits all,” the report says.

It also paints a grim picture of access to insurance. It says that productive sectors like agriculture, which lack access to insurance, have constrained growth in many countries on the continent.

African farmers, for instance, who lack insurance, convert their meagre savings into funds for emergencies instead of investing them in boosting productivity.

“Similarly, lacking access to loans and saving institutions, they (African farmers) are often unable to respond to market opportunities,” the report notes, urging governments to adopt innovative technologies to fight financial exclusion.

A study released in March this year by the Financial Access Partners indicates that Kenya is the most financially inclusive country compared to many other African countries.

The survey shows that 77 per cent of Kenya’s population has access to financial service points within 5-km radius. Tanzania has 35 per cent of its population accessing financial services points within 5km while Uganda has 43 per cent of its population accessing financial points within the same distance.

In Kenya, mobile money agents, who represent 75 per cent of total financial service access points in the country, are the biggest drivers of financial inclusion compared to other African peers.

There are, however, questions on the correlation between access to financial points and the use of financial services.

This is due to the fact that financial inclusion is not uniform across Kenya as some areas boast higher inclusion, with others having low rates of inclusion.

Promote mobile banking like Kenya, report urges African states - Smart_Company - nation.co.ke

 

[MK254]

The survey shows that 77 per cent of Kenya's population has access to financial service points within 5-km radius. Tanzania has 35 per cent of its population accessing financial services points within 5km while Uganda has 43 per cent of its population accessing financial points within the same distance.

Trendsetters, that's what we do best.

CC: Geza Ulole kadoda11 Kimweri Bulldog [MENTION]Askari Kanzu[/MENTION]

 

[waltham]

Trendsetters, that's what we do best.

CC: Geza Ulole kadoda11 Kimweri Bulldog Askari Kanzu

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REPORTS that hardly 12 per cent of Tanzania's 45 million people have access to formal banking services are disturbing, indeed.The implication of the statistics is that at this age of science and technology, there are still 38 million Tanzanians - close to 90 per cent of the population - who still keep money under their pillows.
Such a huge number of Tanzanians do without bank accounts as the country moves towards a cashless economy in which credit cards dominate in almost all transactions. What a puzzle!
Financial service providers - commercial banks in particular - remain crowded in urban centres, alienating the rural dwellers from the noble services.
But, the rural population not only need financial services in terms of credits to finance their economic activities - farming, livestock keeping and business - but they also need banks to take their deposits for safe keeping of the money.
Farmers, livestock keepers and traders in rural areas keep huge amount of cash in their houses, sometimes risking their lives when armed bandits strike demanding the money.
That is why we sincerely support CRDB Bank for introducing agency banking - Fahari Huduma - through which many unbanked people will be reached and served.
The bank's cheap expansion option has proved potential to liberate the rural people who, despite their huge demand for services, they could not access them due to lack of banking infrastructure in their respective areas.
Through the agency model, CRDB will contract third parties to provide the services on its behalf. Already the commercial bank has sealed a deal with Tanzania Posts Corporation which has wide office network countrywide.
While many people might view the new banking product from the service delivery perspective, the model, on the other side, offers great business opportunities for aggressive entrepreneurs as the bank will be paying commission on the services rendered by the agents.
With the vastness of the country, we can imagine the number of jobs that will be created through the agency business. It's upon the entrepreneurs to seize the opportunities.