Awareness limits mobile money surge

Mobile phones rather than bank accounts, offer a better stepping stone to financial inclusion in sub-Saharan Africa says a new Ericsson survey writes JOHN SAMBO.

“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.” Patrik Hedlund, Senior Advisor, Ericsson ConsumerLab said last week.

Many potential customers face basic barriers to accessing the services on their own mobile phones. Ericsson said a lack of awareness and basic prerequisites, and low appreciation of the benefits are some of the hurdles.

Findings from five countries in sub-Saharan Africa reveals 63% of respondents are unbanked, and 52% use mobile money through agents.

Hedlund said: “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 survey also found that among lower socioeconomic groups in sub-Saharan Africa, four out of 10 people lack basic prerequisites for starting their own mobile money account such as a valid form of ID or a mobile phone.

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

According to the survey, consumers find cash easy to use, but the study shows that they also recognize the risk of theft and losscial to them – if they can use it.

Some 40% of global mobile traffic runs through networks supplied by Ericsson.