By Derrick Silimina
The African mobile money story is known to have started in Kenya in 2007 when Safaricom launched its MPESA solution for peer to peer money transfer.
Before that, due to a low rate of banking, sending money from point to point used to be a big issue.
In Zambia today, the dawn of digital payment technologies is opening doors to a whole new generation of clientele whose very first bank account is accessed purely through their mobile phones.
“With just my mobile phone, I can now be able to transact at low cost. For me, this is a real deal unlike before where access to an existing bank account was hectic,” says Joe Mutemwa, a mobile money account holder from Sioma District in Western Province.
Thelma Chinyama, a Lusaka based entrepreneur, echoes Mutemwa: “My mobile money account is cost effective because it has enabled me to save my cash flow and grow my enterprise with ease and at less costs unlike a bank account that attracts monthly charges.”
According to Zambia’s National Financial Inclusion Strategy Paper for 2017- 2022, more than 40 percent of Zambian adults have no access to quality financial products, and about 60 percent of adults who have such access do not use it.
In vast areas of Zambia, especially remote rural regions, people still rely on the barter system (the use of unregulated and unsecured channels, to make payments and store savings).
The main reasons for this poor showing are lack of funds, time-consuming travel to a bank branch, high bank charges, and lack of trust in the financial sector, according to a 2017 World Bank study titled Enhancing Financial Capability and Inclusion in Zambia.
Therefore, the onset of mobile money technology is helping transform economic sectors in the Southern African country, hence it is being flaunted as a revolutionary tool that is expanding access to financial services in low-resource environments.
“As a farmer, my mobile money account is a game-changer to me because each time I need farming inputs such as fertilizer or seeds, I just transact with some agro-dealers in town and they send me my commodities on time.
This is unlike before when it used to be cumbersome to do business via the now defunct Lima Bank,” says Clement Tembo, a renowned tobacco farmer from Petauke District in Eastern Province.
INCREASED USAGE
In this context, the Bank of Zambia recently disclosed that mobile money platforms had recorded increased usage in 2020, with numbers growing to 8.6 million users by December 31 compared to around 4.85 million in 2019.
The central bank further hinted that higher mobile money usage in Zambia has coincided with increased financial inclusion over the two corresponding years, by 10.1 percentage points last year.
“Zambia has continued to make significant progress in the digital transformation agenda, especially in the area of digital financial services. For example, the number of active MNO (Mobile Network Operators)-based mobile money users increased by 77 percent from 4,852,040 as at December 31, 2019, to 8,607,461 as at December 31, 2020,” BoZ Deputy Governor for Operations,” Dr Francis Chipimo states.
As recounted by Nyagaka Anyona Ouko, a Kenyan man who is alleged to be the innovator of the mobile money solution, the idea came as a ‘Eureka’ moment which has remained effective to the informal sector and has the potential of reaching out to the whole population.
It is estimated that in Uganda, 43 percent of people have a mobile money account while in Kenya, the numbers have reached 72 percent.
ADVANCEMENTS
In Zambia, some enthusiastic mobile money agents say life in the world of financial inclusion has now been made easier, thanks to technological advancements.
“The mobile money solution has undoubtedly created jobs for youths, including myself, and we depend on this sector for survival,” says Sara Chola, a mobile money agent based at Lusaka’s sprawling Kamwala market.
Undoubtedly, just as the Internet has changed the way people search for information and shop for products, cellular phones are gadgets that are equally transforming many industries ranging from finance and travel to advertising and retail.
According to telecommunication experts, the mobile money App is installing the SIM card of the device and can be used on regular and smartphone devices. Users can receive, withdraw, and send money without being connected to the formal banking system.
The FinScope Survey of 2020 stated that the financial inclusion increase of 10.1 percentage points to 69.4 percent from 59.3 percent in 2015 was mainly attributable to mobile money transactions.
With approximately 100,000 plus agent lines officially registered in Zambia, according to the Mobile Money Business Association of Zambia, the sector is contributing to the national treasury in terms of taxes.
UNBANKED
Lusaka-based economist Mambo Haamaundu has observed that there is a realization of very low financial inclusion as there still remains a high unbanked population in the country, especially among informal sector players.
“For me, mobile money services are tapping into the unbanked population and as a result play a complementary role with traditional banks. For instance, cash can now easily be transferred from one bank account to a mobile money account with ease,” says Haamaundu.
In view of the global outbreak of the Covid-19 pandemic, most businesses in Zambia have been crippled with some left gasping for breath.
Hence Airtel Networks Zambia Plc, one of the major telecommunication firms in the country, is on course to provide the Zambian business sector with digital transaction solutions in light of the negative impact of the Coronavirus pandemic.
Airtel Network Zambia Enterprise Business Director Lindiwe Banda announces: “We would like to be the partner of choice for any SME customer, so that we grow with them and they grow with us; such that at the point where they are moving from small to medium organizations into large corporates, we can proudly look back with them and say we did it together.”
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