Where are Mobile Financial Services in Africa? John Owens, Senior Policy Advisor Digital Financial Services, 05 February 2014

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Maximilian Ray
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1 Where are Mobile Financial Services in Africa? John Owens, Senior Policy Advisor Digital Financial Services, 05 February #AMPI2014

2 Number of Mobile Money Deployments Source GSMA MMU 2013 Global Mobile Money Adoption Survey

3 Map of Mobile Money Service Providers Globally Source GSMA MMU 2013 Global Mobile Money Adoption Survey

4 Countries with more mobile money accounts than bank accounts and more mobile money agents than bank branches Source GSMA MMU 2012 Global Mobile Money Adoption Survey

5 Partnership as a driving force of Financial Inclusion Financial Inclusion

6 Mobile Money Supporting Financial Inclusion in Other Ways Percentage of adults using a bank account % % 4 Million bank accounts 20 Million bank accounts 24 Million registered mobile money users

7 The Case of M-Shwari

8 Small Value and Credit Savings M-Shwari, a savings and credit product from Safaricom and Commercial Bank of Africa (CBA) has registered a phenomenal uptake. The product enables M-PESA subscribers registered for at least 6 months to get a loan, anywhere from $1.15 to $235 for a 30 day term instantly into their e- wallets.

9 Preliminary Results: Policy Profile Questionnaire

10 Policy Profile Questionnaire Covered 4 policy areas: Financial Inclusion Data, Mobile Financial Services, Financial Integrity, and Consumer Protection Questionnaire sent to 29 African countries and BCEAO totaling 37 countries. Angola, Burundi, Cameroon, Cape Verde, Central Africa Republic, Chad, DRC, Egypt, Gabon, Gambia, Ghana, Guinea, Kenya, Liberia, Madagascar, Malawi, Morocco, Mozambique, Namibia, Nigeria, Rwanda, Sao Tome and Principe, Sierra Leone, South Africa, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe and BCEAO (Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal, and Togo). 10 countries and BCEAO have responded. The respondents altogether represent 18 countries (49%).

11 Is there an enabling law, such as an NPS Act, which gives the financial regulator clear authority over payment services including MFS? Guinea No 94% 6% Yes Uganda Burundi DRC Kenya Namibia Nigeria Rwanda Zambia BCEAO Tanzania Almost all respondents have the clear legal mandate to regulate MFS.

The vast majority of respondents appears to allow both banks and nonbanks to issue e-money.

12 Are there existing category of account, other than deposit accounts, in which client funds are repayable on demand and which may be issued by banks and/or non-banks? The vast majority of respondents appears to allow both banks and nonbanks to issue e-money. Guinea 0% 6% 6% Zambia No New policy areas will be added as fresh evidence emerges. 88% Non-banks Both banks and non-banks Burundi DRC Kenya Namibia Nigeria Rwanda Tanzania Uganda BCEAO

Are both bank and non-bank payment service providers

services, on the same terms and conditions?

Different terms 28% No 17% Equal terms 55% Rwanda Zambia

13 Are both bank and non-bank payment service providers allowed to appoint agents to provide cash handling services, on the same terms and conditions? DRC Kenya Namibia Nigeria Tanzania Burundi Guinea Uganda Different terms 28% No 17% Equal terms 55% Rwanda Zambia BCEAO The industry appears to be moving towards a level playing field with regards to agents.

14 Which types of entity may serve as agents for financial service? DRC Kenya Namibia Nigeria Tanzania Uganda BCEAO Any legal person meeting minimum requirement 88% Any legal person 12% Rwanda Zambia Minimum requirements for agents are the norm. Responses based on 16 countries that have agents

The trend appears to be to prohibit exclusivity of agents, especially in the

15 Are exclusive contracts between financial institutions with agents allowed? Yes Namibia Rwanda DRC Kenya Nigeria Tanzania Uganda Zambia BCEAO No 88% 12% The trend appears to be to prohibit exclusivity of agents, especially in the most advanced mobile money markets. Responses based on 16 countries that have agents

Guinea Namibia Uganda Zambia BCEAO No Yes 29% DRC Kenya Nigeria Rwanda

16 Is remote account opening (such as over the air on a mobile device) allowed for transactional accounts? Guinea Namibia Uganda Zambia BCEAO No Yes 29% DRC Kenya Nigeria Rwanda Tanzania 71% The majority do not allow remote opening of accounts but most of the fastest growing markets & national IDs do allow this.

17 Are payment service providers required to receive customer complaints and enquiries at all times and have to respond within a specified window? Guinea Namibia BCEAO No 59% Yes 41% DRC Kenya Nigeria Rwanda Tanzania Uganda Zambia There is scope for improvement on consumer protection

Burundi Guinea Kenya Rwanda Tanzania Uganda No 33% Yes Namibia Nigeria Zambia BCEAO DRC

18 Does your law, regulations or guidance allow for risk-based simplified CDD where in relation to specific low-risk products and services? Burundi Guinea Kenya Rwanda Tanzania Uganda No 33% Yes Namibia Nigeria Zambia BCEAO DRC 67% While the majority of countries in the survey do now allow for risk-based simplified CDD, many are still working on regulations.

19 What types of low-value products qualify for simplified CDD in terms of the country s AML/CFT framework? Percentages* of countries with simplified CDD, by product types Micro-insurance products 9% Prepaid cards 82% Low-value mobile-money single transactions Low-value single transactions 18% 18% Basic mobile money accounts 100% Basic bank accounts 27% * The denominator is a number of countries that allow risk-based simplified (=11 countries)

20 AMPI Stock-Taking: Regulatory Environment of MFS in Africa

21 Measuring Access & Usage of MFS Dimension Definition Indicators Access Ability to use formal financial services, i.e. minimal barriers to opening an account - Physical proximity - Types of services Number of MFS cash points per 10,000 adults Number of MFS cash points per model % of Relevant administrative units with MFS cash points % of active MFS cash points Average number of MFS types offered by MFS deployment Usage Actual usage of financial services / products - Regularity - Active vs. Registered % of adults with at least one MFS account Proxy: # of MFS Accounts per 10,000 adults Proxy: # of MFS accounts per 10,000 adults by deployment % active MFS accounts % active MFS accounts by deployment Total Value in US$ of MFS transaction monthly for all MFS deployments Ave. # of MFS transactions per active MFS cash points monthly

22 Thank you!

Table A.LPG1 : TOTAL LPG CONSUMPTION (Best available Estimates)

Table A.LPG1 : TOTAL LPG CONSUMPTION (Best available Estimates) 1000 MT 1 Burkina Faso 0.509 0.587 0.615 0.606 0.435 0.429 0.691 1.057 1.385 1.698 2.156 2.432 2.888 2 Cape Verde 4.058 4.268 4.988 5.259