Mobile money usage has proven to be a viable alternative to formal financial services in rural areas, where achieving financial inclusion is challenging, the International Monetary Fund (IMF) has said.
In its 2019 Financial Access Survey, the global lender said mobile money usage has had a profound impact on the way people access finance in Malawi and other countries in the region where banking penetration is minimal.
The report shows that mobile money agents growth far exceeds the growth in traditional financial access points such as bank branches as the number of commercial bank branches per square kilometre remained less than two.
At the same time, the number of mobile money agents per square kilometre increased from 18 to 27.
According to the report, this increase corresponds to a growth rate of 50 percent in the rural areas compared to 16 percent in urban areas.
TNM plc head of marketing Sobhuza Ngwenya said in an interview on Monday that uptake of mobile money usage is progressing in the right direction and making basic financial services accessible.
“We have found that people are now using their mobile phones largely to buy airtime and make various payments. Further to this, person to person money transfer is also rising.
“Other than this, a mobile phone is also being seen as a potential bank,” he said.
Last week, Reserve Bank of Malawi (RBM) Governor Dalitso Kabambe said digital financial services are a paramount component of the monetary and financial system of any economy.