Mobile Financial Services, Key Driver of Africa Economies

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When the mobile payments revolution started in Kenya, little was known about the amount of money that telecoms could generate by offering financial services to the poor. A few years down the road, the figures started coming in showing that mobile financial services are extremely promising revenue streams.

In May 2012, financial statements from Safaricom indicated that M-PESA contributed 15.8% of Safaricom’s total revenue (compared to 12.5% the previous year), making it the company’s second largest revenue stream after voice. In addition, in Kenya M-PESA created direct employment for 50,000 people a number that banks may never match.  These opportunities in revenue growth and employment creation are seen in the rest of Africa e.g in Uganda, where companies such as MTN Uganda and Airtel Uganda have introduced mobile financial services.  

The economics of Mobile Financial Services have evolved to include revenues from Person to Person transactions, to Person to Business. Payment for utilities such as Water, Electricity and TV and other payments such as for School Fees are now increasingly being effected with mobile financial services. As a result over a short period of time, mobile financial services are becoming key drivers of Africa economies.

Mobile Financial Services represents the potential for an enormous leap forward in economic development. It helps include people previously in the shadow of the informal economy and increases government earnings that can fund social and economic development. It delivers access to formal financial services and brings the security and convenience of electronic payments to millions of people in developing countries, breaking the cash economics that often locks them into poverty. It can enable entire industries, creating jobs and revenue streams that didn’t exist a decade ago. (FORBES)

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