Editor’s Note: May 28, 2018
Financial inclusion shouldn’t be a zero-sum game
In March Standard Chartered Bank launched its first African ‘digital-only’ banking service in Côte d’Ivoire. The Financial Times called the move “part of a fightback by banks in Africa,” alluding to the tension that exists between traditional lenders and telcos around the rise of mobile banking.
The latter have led disruption of the sector, in turn making Africa the world’s leading mobile money market. It accounts for half the 247m active global mobile money accounts.
Banks have been caught off guard, with many seeing it as a threat to their bottom line. This has resulted in some regulators cracking down on mobile money services in a bid to protect traditional lenders.
This zero-sum approach comes at the expense of financial inclusion. Two thirds of Africans are estimated to lack formal banking services, and with just five bank branches per 100,000 adults mobile is the only way the gap will be bridged. Yet outside Kenya the sector has struggled to grow.
A more collaborative approach is needed, and is possible.
Togo-based Ecobank, active in 36 African countries, recently announced a major partnership with Africa’s biggest mobile operator MTN to provide financial services across the continent.
It’s a good example to follow.
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