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Cash still king as only 20% of Sub-Saharan Africans ‘use Mobile Money’

Cash still king as only 20% of Sub-Saharan Africans ‘use Mobile Money’

Only 20 percent of  Sub-Saharan  Africa population  use mobile money service on mobile phone and half of these are unbanked, a new report from Ericsson ConsumerLab has shown.

The report presents insights from a sample of 6,215 respondents aged 17-59, representing 150 million people across five countries which include Angola, Democratic Republic of Congo, Ghana, Nigeria, and Uganda.

According to the findings, while 63 percent of adults in the region have no bank account and 20 percent use mobile money on their mobile phone themselves, 52 percent use mobile money through agents.

Explaining further, Patrik Hedlund, Senior Advisor, Ericsson ConsumerLab, says that for this large, unbanked proportion of society, cash is the predominant way of receiving and making payments, as well as saving and borrowing.

Mobile Money

The report also shows that consumers find cash easy to use, but that they as well recognize the risk of theft and loss.

According to Hedlund, “consumers have to make long journeys to reach the location where they can pay their bills.”

But on the other hand, “saving money and taking loans also becomes problematic in unbanked Africa, with many hiding cash in their homes and relying on informal lenders who charge high interest rates. So, mobile money is really beneficial to them if they can use it.”

According to the Ericsson report, “lower income people and the unbanked are the ones who are least involved in the formal financial system, due to factors such as distance to banks, education, and the inability to authenticate their identity.”

The report also recognizes the role agents play in driving demand for self-sufficiency as it noted that the 20 percent who use mobile money themselves on their own phones, one in four were encouraged by an agent to start using the services independently.

While revealing that interviews were conducted with experts from the World Bank’s Consultative Group to Assist the Poor (CGAP) and the Bill & Melinda Gates Foundation, he explains that the survey data was collected in July and October 2015 and compiled during face-to-face interviews, each lasting 40 minutes.

Donatus Anichukwueze Technology Writer at Technology Times Media e-mail: donatus.anichukwueze@technologytimes.ng

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