The partnership between MTN and Flutterwave is important for digital inclusion
By Seth Onyango – Bird Newsroom.
Just a few months ago, the telecommunications company Safaricom – famous for its Mpesa and other digital offerings – made its debut in Ethiopia. Today, its regional counterpart, MTN, signed a partnership agreement with Flutterwave that will allow companies in Cameroon, Côte d’Ivoire, Rwanda, Uganda and Zambia to make money transfers. money via MTN Mobile Money (MoMo). These two measures are great victories for financial inclusion in Africa.
This digital movement is ready to plug in millions of unbanked people in these countries in traditional financial services and support businesses, especially those located in remote areas.
MTN and Flutterwave’s deal follows Safaricom’s entry into Ethiopia earlier this year, giving it access to a market of more than 110 million potential subscribers.
Safaricom, the largest telecommunications company in East Africa, is preparing for the commercial launch of its operations in Ethiopia in 2022, with its subsidiary announcing that it will invest $ 8.5 billion in ten years to drive digitization. The company aims to build a team of 1,000 employees by June of next year.
“Our ongoing recruitment process is intentionally guided by the promise of a digital future for the Ethiopian people,” said Anwar Soussa, Managing Director of Safaricom Ethiopia last week.
MTN MoMo is a fintech platform providing individuals and businesses with an electronic wallet, for contactless financial services such as wire transfers and electronic payments.
Its deal with the Flutterwave deal follows an explosive growth in mobile money systems in Africa that has makes the continent a world leader.
More importantly, it should boost the financial inclusion of those who do not have access to traditional banking services in the aforementioned countries. According to Statista, mobile money has become big business for telecommunications providers in Africa.
Around 144 mobile money providers operate in Africa, with two companies such as M-Pesa, MoMo and Orange Money representing a significant share of the market.
“M-Pesa, managed by Vodafone and Safaricom and operating in seven countries, has experienced significant growth in recent years. The service attracted a 12 million users from 2017 to 2020, reach 41.5 million users by 2020, ”says the research firm.
“M-Pesa users completed 12.2 billion transactions in 2020, generating $ 784.36 million in revenue for parent company Safaricom. MoMo – MTN Group’s mobile money offering – has seen similar growth, reaching 35.1 million active customers in March 2020. ”
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IMF estimates show that Africa has more users of digital financial services than any other region in the world, accounting for almost half of the 700 million individual users worldwide.
In 2011, the level of financial inclusion in Africa was just over 23% and jumped to almost 43% in 2017, driven by the growth of digital financial services. The figure is expected to be much higher today.
According to the AfDB, financial inclusion has grown considerably in recent years, as evidenced by the number of countries that have committed to respecting the Maya Declaration and the G-20 Action Plan for Financial Inclusion, as well as the strategies and targets set by individual governments.
The Kenya Economic Report 2020, carried out by the Kenya Institute for Public Policy Research and Analysis (Kippra), for example, shows that financial inclusion in this East African country jumped to 82.9% in 2020 – impressive growth compared to 26.7% a decade earlier.
In Nigeria, a country with an estimated population of over 211 million in 2021, the rate of financial inclusion has grown steadily from 56.8% in 2016 to 63.2% in 2018 and is expected to grow steadily. reach 70% by 2020.
In the DRC, mobile money services jumped 16% in 2017, pushing the overall rate of financial inclusion from 3.7% to 26% from 2011 to 2017.
Yet Africa’s unbanked population remains huge with around 350 million adults without accounts, including 63 million Nigerians. In Ethiopia, 60% of its adult population, about 70% of the DRC’s adult population, and 66.67% of Egypt’s adult population did not have a bank account in 2017. With 43% bank account penetration, the Africa lags behind the global average of 69%. and the average of 63% of developing countries.
bird story agency.