Mobile phones reinvent banking

The mobile telephone in the hand is usually just a tool for communication. But in sub-Saharan Africa the cellular phone is also a bank. In Ghana the mobile is enabling people to send and receive money from their able relatives even if they live far away from a bank. The changing mobile telephone usage is about to transform the financial scene in this West African country and the rest of the African continent – soon it will be easy to transfer cash.

Michael Egbe is one of the people getting onto the new mobile money market. Sitting under his branded umbrella to shield himself from the scorching sun, Egbe sells mobile telephone accessories. He also sells sweets and all manner of things that are eye catching. It is a busy street with people walking up and down, transacting this and the other business, hence Egbe’s choice to sit at the noisy side of the road to catch the attention of his customers. Every minute a customer walks up to Egbe to buy airtime.

He is excited that there will be more for him to sell in the future, he knows that another product added to the menu will earn him more money. “Mobile money is very good,” he says, then adds, “it can help you so as not to carry money on you, yet be able to send money to friends and family in far off places,” Michael Egbe offers.

MTN is curving its market niche in mobile money market

Everywhere you look in Ghana people are using their mobile phones. In the MTN offices, people are signing up to use the new facility while others are looking for the opportunity to be appointed agents.

The MTN Mobile Money works just like the mobile money transfer programs, that have existed in Kenya like the MPesa facility run by Safaricom and Zain’s Zap mobile money transfer, Uganda is also among the countries served by MTN and Zain and will soon roll out the new development.

Eli Hini, Commercial Senior Manager in charge of MTN’s new Mobile Money program says there is a huge potential in the Ghanaian market. He sees the increased mobile telephone ownership and usage as the main telling signs that the product will succeed. “We believe that in Ghana it will give us the same opportunities as was done in Kenya, since more and more people in Africa have mobile phones,” he said in an interview.

Hini is thrilled that on a continent where only one in ten people has a bank account the introduction of mobile money facility in Ghana could see the over 90 per cent of people without bank accounts get access to financial services. “MTN mobile money service is providing basic financial management service on the mobile phone we all know that the mobile phone has become a common tool in our society, and people who own mobile phones keep on increasing by the day,” says Hini.

Basic financial management service now at the finger tip

World Bank specialist in Long Term Savings, Robert Holzmann calls the mobile money transfer facility a crucial innovation. He is sees the new development as an avenue through which to expand access to financial services, but warns that the facility also has limits. “This is a crucial innovation for the whole world and for Africa,” he says and adds, “it is a cheap to make the exchange of money in a simple,” he notes.

Holzmann thinks the mobile money transfer concept does not encourage saving while at the same time encourages impulse spending of the money. “One could conjecture that it’s a concept that is not conducive to saving as much as one would have hopped,” Holzmann warns.

Where does this leave the consumer?

Consumer International’s Executive Director Samuel Ochieng’ feels that more has to be done to protect users within the new improvement in mobile telephone usage requires apt legislation to level out the playing field.

“The use of mobile phones to transfer money is gaining momentum, the volumes being transferred is in billions of dollars or shillings, but what we want to see is more responsibility from governments to put in place legislation and at the same time enforce the law through regulation to protect the users” says Ochieng’.

For business people like Michael Egbe access to finances is the key. As he sits by the side of the road, so that people can buy airtime for their phones as they pass by. With the new development, his customers might stop coming to Egbe as buying airtime will be much easier from the accounts on their phones.

Judith Akolo


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