The International Finance Corporation (IFC) has highlighted the need for providers of mobile money and other digital financial services, to understand the specific needs of low income clients and provide convenient and affordable services to them.
A study by the IFC on mobile money in Côte d’Ivoire, found that while financial inclusion has increased from 37 per cent to 57 per cent in just a few years, and while mobile money accounts in the country outnumber the combined number of bank and microfinance accounts, almost half of all the registered mobile money accounts in Côte d’Ivoire are inactive.
The study “The Mobile Money Customer That Isn’t: Drivers of Digital Financial Services in Cote d’Ivoire”, was conducted by the Partnership for Financial Inclusion, a joint initiative of the IFC and The MasterCard Foundation.
“The good news is that more and more low-income people, small-scale entrepreneurs and rural communities in sub-Saharan Africa are gaining access to financial services. The challenge now is to make sure products and services are improved to meet the specifics needs of new customers,” David Crush, IFC Programme Manager in the Partnership for Financial Inclusion, said.
The IFC said the phenomenon in Cote d’Ivoire is evident in many other emerging economies and the findings of the study are relevant across Africa.
Of the total mobile money transactions in 2014 among member countries of the West African Economic and Monetary Union (WAEMU), Côte d’Ivoire accounted for 53 per cent of the transactions, Mali 20 per cent and Burkina Faso, 13 per cent. The rest of the countries – Senegal, Niger, Benin and Togo, accounted for 14 per cent of the transactions.
A significant section of the inactive users (43.6 per cent) attributed their inactivity to irregular income, 27 per cent saw no need to use mobile money and 15.5 per cent said the service was too expensive.
The fourth reason was a lack of mobile money agents close to the customer. IFC warns however that “a balance is required between the proximity and the productivity of agents” as overcrowding of mobile money agents would make the business unviable.
The study recommends that mobile financial services providers keep prices low, ensure good customer education and offer a broad range of products and services that cater for customers with irregular incomes.
“The research in Côte d’Ivoire is a wake-up call to all of us working to advance financial inclusion. More than ever, digital financial services providers need to understand early and often what it is that low-income clients need and expect in a mobile money account, and then offer that product and service affordably and conveniently,” Ann Miles, Director of programmes, Financial inclusion and Youth Livelihoods at The MasterCard Foundation said.
By Emmanuel Odonkor