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Mobile bank in every African pocket?

03/13/2008
Innovation
If most traditional banks are inaccessible to many Africans, the service of mobile phone banking is expanding to the poor on the continent. Indeed, since a few years, financial institutions have extended their services through the growing use of cell phones in rural areas. Companies like Wizzit, a cell phone banking facility, have found a market in Africa and have adopted an innovative approach to mobile banking by targeting poor people. Wizzit does not require users to have a bank account and is compatible with early generation cell phones popular in Africa. The facility even works with customers who use pay-as-you-go cellphones. Salaries can be paid electronically into a Wizzit account. Account holders also receive Maestro debit cards accepted at ATMs and by retailers. There is no minimum balance or annual fee, but users pay the equivalent of US$0.15–0.78 per transaction.
Perspective
According to a World Bank survey, only 20 per cent of African families have ordinary bank accounts. Moreover, most banks have branches only in urban areas. Consequently, regular bank services are often unavailable. However, the proliferation of mobile phones is considered as new way to offer financial services to Africans. Rob Conway, head of the Global System for Mobile Communications Association, says that innovations like Wizzit have “changed the lives of millions of Africans, catalyzing economic development and strengthening social networks.” The greatest impact is in rural areas where 85% of farmers don’t have bank accounts. Instead of keeping money under mattresses , people now inject money in the economy. Also, contrary to a regular bank account, a Wizzit account is not closed if the customer doesn’t use it regularly. It seems particularly useful for seasonal workers. We can finally emphasize that this new market is drawing the attention since some counterparts to Wizzit have emerged elsewhere in Africa. In Kenya, around one million use M-Pesa, a Safaricom service allowing customers to transfer money using a mobile phone. While in Zambia, Celpay allows businesses to pay for services and receive payments via mobile phone accounts.
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