The Reserve Bank of Malawi (RBM) has said mobile money is one of the most powerful tools in attaining financial inclusion in the country.
RBM spokesperson Mbane Ngwira said mobile money offers the lowest cost access means to formal financial services because people can transact funds from anywhere and anytime unlike where brick and mortar are concerned.
“Mobile money is easier to use than cards or internet based payments. Many people, even those in rural areas, are already familiar with use of mobile phone and hence they may require a limited amount of training on how to use the same mobile handset for financial transactions. This may not be the case with card or internet payments,” he said.
According to Ngwira, the use of mobile money becomes attractive for rural based clients because whenever they want to cash out they are normally in contact with agents within their locality, somebody whom they are already familiar with hence built trust unlike in bank branches where they meet “strange” faces and this sometimes scares people away.
“All in all, since mobile money coverage is much wider than traditional banks it means more people participate in the formal financial services across the country, thereby making mobile money the easiest way to loop in the underserved or excluded in the formal financial services industry,” Ngwira explained.
A recent Financial Access Survey by the International Monetary Fund (IMF) indicated that mobile money usage has had a profound impact on the way people access finance in Malawi and other countries within the region where banking penetration in minimal.
The survey showed that mobile money agents’ growth far exceeds the growth in traditional financial access points like bank branches in rural areas as the number of commercial bank branches per square kilometer remained less than 2, the number of mobile money agents per square kilometer increased from 18 to 27.
Economic analysts argue that usage of mobile money is indeed on the rise as it is estimated that seven million are now subscribers of either TNM Mpamba or Airtel Money and mobile money agent network is estimated to have grown to about 45 929 by mid this year.
Presently, government through the Financial Sector Development Strategy II is targeting over 70 percent of Malawians accessing financial services of which 20 percent accessing formal credit by 2021 from the current 34 percent.
With the strategy government believes that inclusive finance will be essential for meeting objectives of government’s development strategies.