In Sub-Saharan Africa, mobile wallets are huge — bigger than anywhere in the world, actually. While it’s been that way for years, the World Bank’s latest Global Financial Inclusion database gives us solid details on just how prevalent they are in the region. According to the report, 12 percent of adults (64 million) in the area have mobile wallets or what Africans call “mobile money accounts,” which aren’t connected to banks. Half of those people have traditional bank accounts, but half rely only on their phones for their financial needs. It seems to be especially popular in Kenya, where 58 percent of adults access their money through their phones.
Thanks to mobile wallets’ increasing popularity, 34 percent of adults in the region now have some sort of financial account of their own compared to 24 percent back in 2011. It’s worth noting that there’s still a gender gap, though, and there are more men who have accounts of their own than women.
Seeing as feature phones can be extremely cheap, it’s not surprising that folks in the area would skip PCs and go straight to phones for their computing needs. But, why are mobile wallets not as big in other developing nations, such as those in Europe and Asia (the database says only 2.5 percent of adults have mobile wallets in South Asia, for instance)? You see, they’re especially huge in Africa due to the boom in services that offer phone-based money transfers and microfinancing in the continent.
A good example is a Vodafone-owned service called M-Pesa, which allows users to deposit money to a mobile-based account. It also lets users transfer amounts to other people (say, when buying goods), through PIN-protected text messages. In addition, microfinance companies often offer more competitive loan rates to users willing to receive money through their mobile wallets than to those who choose to get the amount in cash. In a way, they serve the purpose of both debit and credit cards, proving that even cheap phones can change the way people live.
[Image credit: Ken Banks/Kiwanja/Flickr]
Source: The World Bank