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Mobile Finance at a Crossroads in Africa

The rapid growth of mobile finance in Africa is well documented. Domestic money transfer services in particular have benefited from the fact that 70-90% of people across the continent lack a bank account. Because of the small disposable incomes and low-value transactions of the bottom layer of the income pyramid, banks have simply not found it worthwhile to address this market.

At the same time, many people prefer to avoid the bureaucracy it takes to get a bank account. Mobile network operators, on the other hand, have the infrastructure and reach to offer such services — and the commercial incentive to do so. The problem is that this presents significant regulatory issues with some far-reaching implications.

Not only must financial and telecommunications regulators decide how to best ensure strong foundations for their respective industries while monitoring the rapid developments at their intersection, but governments will also become increasingly involved, given the economic and social benefits of a financial system that does not cater only to the few.

To read the rest of this commentary from Pyramid Research , click here.

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