Within Sub-Saharan Africa, mobile money providers have waived or reduced transaction fees while governments are encouraging digital payments as a strategy to wean off person-to-person contact. The COVID-19 pandemic has pushed Kenya Commercial Bank (KCB), east Africa’s largest lender by asset base, to work remotely and accelerate migration towards digital banking platforms. KCB’s CEO Joshua Oigara told Global Finance : “The pandemic has brought in a new way of thinking with regards to the work environment. We are now able to run our business with some staff working from main sites, secondary stations and others from home. These are options which had not been fully explored before. But we are now likely to see this shift gaining more prominence into the future.” He added that migrating transactions from branches to digital channels like mobile, agents and internet banking will now be given top priority.
Sub-Saharan Africa’s economies are almost exclusively cash-driven given that only 43% of the adult population has an account with a bank or with a mobile money service provider according to the World Bank (WB), rendering banking branch networks indispensable.
Countries around the world have embraced digital payments as a contactless means of getting money to citizens but in Sub-Saharan Africa, the lack of financial inclusion is an obstacle, says Anit Mukherjee, a policy fellow at the Center for Global Development, a US-based think tank.
"The lack of bank and mobile money accounts is the biggest gap in digital readiness in Sub-Saharan Africa. It’s difficult to get money to citizens who don’t have either," Mukherjee told Reuters .
In East African countries including Kenya, Uganda and Tanzania, mobile money is already the currency of choice for purchases ranging from buying a newspaper to paying hospital bills—driven largely by the success of Safaricom’s service M-Pesa, a mobile payments system started in Kenya in 2007 that now boasts 30 million users in 10 countries.
In West Africa, only about one in four adults use mobile money, with industry experts and analysts saying the outbreak could be an opportunity to increase usage and bring more people into the digital economy.
According to Jill Shemin, an indepedent consultant on digital finance in West Africa, the pandemic is a trigger that could dramatically increase usage of digital platforms including within the banking sector.
Within Sub-Saharan Africa, mobile money providers have waived or reduced transaction fees while governments are encouraging digital payments as a strategy to wean off person-to-person […]