The document discusses financial inclusion in Africa through mobile financial services. It notes that Africa leads the world in mobile financial service deployments, with close to 80% of adults in Africa being unbanked. It identifies barriers like regulations, interoperability issues, and financial illiteracy that limit adoption. Opportunities exist in providing innovative services to individuals, small businesses, women, and for access to utilities. Mobile technology can help scale financial inclusion by connecting sources and destinations of funds through integrated mobile wallet platforms.

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Delivering innovations to scale up
Mobile Financial Services to promote
Financial Inclusion in Africa

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Financial Inclusion
Finance is not an end by itself but a means to help
solve significant development challenges in order
to improve the lives of people
Financial Inclusion helps to make basic, essential
services and utilities like
energy, health, education, and water more
accessible to people at the bottom of the
economic pyramid
Access to affordable financial services helps in
overcoming poverty, reducing income disparities,
and contributes towards overall social and
economic development (GDP Growth)

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Population of Africa –
more than 1.1 billion
Total mobile subscribers:
above 800 million
Close to 80% of the adult
population is unbanked
which stands at 326 million
25 African countries
have mobile penetration
more than 90%
Nigeria mobile
subscriptions at 120
million
Sources
1. World Bank
2. MDI
3. GSMA
4. Tech 360 (http://www.tech360ng.com/nigerian-subscribers-at-120m-in-2013-q2-mtn-tops-table/ )
5. Business Community (http://www.bizcommunity.com/Article/410/87/62217.html
Africa – An Overview

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Africa leads MFS with 117 of the
total 220 deployments in the world
Source: GSMA
Mobile Financial Services in Africa
46% mobile money transactions
processed in East Africa
Main services offered
• Airtime Top-up
• P2P Transfer
• Bill Payment
• Receive Bulk Payments

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Dimensions of Financial Inclusion
Access
Usage
Quality
Availability of formal, regulated financial services
Physical Proximity Affordability
Actual usage of financial services and products
Regularity Frequency Duration of time used
Products are well tailored to client needs
Appropriate segmentation to develop products
for all income levels

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Barriers to Adoption of Mobile Financial Services
• Need to provide status for electronic
transactions
• Flexibility in the application of CDD
requirements for technology based
solutions
Stringent
Regulations
• Hindering wide spread access
• Less than 20% of the products are fully
or partially interoperable
Limited
Interoperability
• Most agents lack knowledge & ability
• Well qualified agents not easy to find
Scarcity of
Qualified Agents
• Lowest Literacy rate in the world
• Risks and benefits of MFS needs to be
articulated well
Low level of
Financial Literacy &
Income

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Transformational Approaches for Financial Inclusion
Access to a range of quality financial services at affordable prices, delivered with convenience and
dignity, can change the course of an individual’s, family’s, or business’s future.
Mobile Initiatives
Individuals
SMEs
Women
• Provide innovative products & services beyond payments
• Savings, credit , insurance, rewards etc
• Access to finance (working capital, bridge finance, bank guarantees etc)
• Credit Scoring and increase in the borrowing limits
• Insurance for protection against unforeseen events/ exigencies
• Access to income generation loans (beyond micro-loans)
• Support for entrepreneurship
• Financial Literacy
Utilities &
Essential
Services
• Access to energy, clean water, education, health etc
• Mobile Markets for agriculture
• Informational services (weather, commodity price, best practices etc)
Social&EconomicDevelopment

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Retaining the tapped and targeting untapped customers
• Small percentage of households enjoy formal banking
• 90 % of transactions are in the form of cash
• Lack of savings, asset creation and protection tools – savings less than 15% in Africa
Current State
• Limited information available about
• Nature & size of market
• Investment required
• Risk involved
• Customer needs & preferences
Barriers for Financial Access
• Government adopting digital payments
• Offering customers with tools to keep digital money within the ecosystem
• High scope for Mobile Savings, Loans and Microinsurance products
Opportunity
Source: Publication on Financial inclusion in Africa by
African Development Bank

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Reach out to SMEs
• There are 50 million SME’s in Africa
• 69% of them operate in informal sector
• Contributes to 58% of employment and 33% of GDP
Current State
• Considered high risk by banks
• Lack of wide range of financial products that suite their business
• Poor customer information and knowledge
Barriers for Financial Access
• MSME (Micro-Small Medium Enterprise) market worth USD 150 billion
• Innovative, tailored and technology – enabled intervention
• For e.g. M-Pesa’s recent micro insurance product for farmers “Kilimo Salama”
Opportunity
Source: Publication on Financial inclusion in Africa by
African Development Bank

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Reach out to Women
• One third of the firm owners are women
• Women account to 20% of the banked population in the continent
• Financial gap more acute in rural areas where women benefit from only
•One tenth of the credit to small farmers and less then 1% total credit to agriculture
Current State
• Economic barriers
• Social Cultural barriers
• Unfavourable environnent
Barriers for Financial Access
• Financial inclusion for women has social benefits (helping in children's nutrition, clothing, health
and education)
• Microfinance Institutions have a large scope in increasing financial adoption for women
• Help build credit history for easier access to loans from banks
Opportunity
Source: Publication on Financial inclusion in Africa by
African Development Bank

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Access to Utilities & Essential Services
• 600 million of the population is part of agriculture
• 5% of the budget and 10% of the commercial bank lending goes to agriculture
• Only19% of the rural population is banked
• Agriculture contributes to 40% of the GDP and provides livelihood to 70% of the population
Current State
• Limited level of finance
• Lack of access to credit, payment services and insurance products
• Lack of engagement by commercial banks
Barriers for Financial Access
• Significant potential in offering MFS for
• Mobile Market Place, Informational, agricultural loans, energy, water, health, education etc
• Microfinance Institutions
• Provided 7.8 billion loans to 6.1 million borrowers, but the untapped opportunity is larger
Opportunity
Source: Publication on Financial inclusion in Africa by
African Development Bank

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Mobile is the gateway to Financial Inclusion

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Innovative Mobile Financial Services for Financial Inclusion
Bill Payments
Send Money
Airtime Purchase
Receive bulk
Payments
Micro
Insurance
Savings
Credit
Loyalty/Reward Programs
Online Payments
Credit
Scoring
Proximity
Services
First Generation
Services
Second Generation
Services
Next Generation
Services
Ticketing
Retail
Payments
International
Remittance
Salary
Payments

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mFino MFS platform ensures that
cash remains within the system
The platform connects both the
source and destination with an
integrated first mile to last mile
mobile wallet
All sources of funds can be routed
to the mobile wallet and payments
can be made using the mobile
mFino Mobile Financial Services Platform
Any Phone Any Payment Method Any Channel

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