DAKAR - Penda Kande
usually pays for taxis in cash, but since coronavirus hit
Senegal, the 30-year-old nurse has switched to mobile money to
avoid contamination.
"With the virus it's better to use Orange Money," said
Kande, referring to the West African country's most popular
mobile money service, offered by French telecoms group Orange
.
She was one of several clients making withdrawals or
deposits with mobile money agents on a street corner in
Senegal's capital Dakar last week, where one Orange Money agent
said business had nearly doubled since coronavirus hit.
Mobile money providers across Africa have reduced or waived
transaction fees and governments are encouraging digital
payments to reduce person-to-person contact and potentially slow
the spread of the virus.
In West Africa, where mobile money is growing fast but still
used by only about one in four adults, industry experts and
analysts said the outbreak could be an opportunity to increase
usage and include more people in the digital economy.
"I think right now there is a really key trigger point, and
that could be seized on to leap forward," said Jill Shemin, an
independent consultant on digital finance in West Africa.
Mobile money has been hailed as a way for people excluded
from the formal financial system - including women, youth and
the rural poor - to access services such as savings and loans,
start businesses and receive payments.
In East African countries such as Kenya, Uganda and
Tanzania, it is already the currency of choice for everything
from daily shopping to paying bills, driven largely by the
success of Safaricom's service M-Pesa.
But mobile money arrived later in West Africa, where
barriers include low literacy and lack of trust as well as lack
of necessary documents and a preference for cash, according to
the telecoms industry group GSMA.
While coronavirus has given people a new incentive to go
digital, operators have also lowered barriers by making it
cheaper and in some places easier to sign up, said analysts.
"I do believe this could be a catalyst for high adoption,"
said Ruan Swanepoel, head of the GSMA's mobile money programme,
citing government efforts to encourage digital payments and ease
regulation as deciding factors.
In one example, Ghana's central bank announced that all
mobile phone subscribers could open a mobile wallet and transfer
up to 1,000 cedis ($170) daily without providing additional
documentation.
Required documents such as ID and proof of address vary by
country but can be a barrier particularly for women to open
accounts, said Sabine Mensah, regional digital lead for the
United Nations Capital Development Fund (UNCDF).
"It is an encouraging thing to see that in these times, when
we really need to find ways to include the maximum number of
people, that central banks are taking that question out of the
way," Mensah told the Thomson Reuters Foundation.
LOWERING THE BARRIERS
Tayo Oviosu, CEO of Nigerian mobile money company Paga, with
15 million users, said that he expected to see an uptick in new
accounts and transactions after lowering fees to help people
avoid cash.
"We do see a real opportunity to drive... financial
inclusion," he said.
Lowering the barriers for mobile banking can also help
people weather the economic impact on the outbreak, said Alfred
Hannig, executive director of the Alliance for Financial
Inclusion, a global network of policymakers.
"If you want to mitigate the crisis, digital financial
services for the poor is definitely an avenue to look at," he
said.
Many West African governments have already been working
toward digitising social payments such as pensions and welfare
and should fast-track the process now, said Mensah of UNCDF.
As countries around the world consider digital payments as a
way to get money to citizens during the pandemic, lack of
financial inclusion is a major barrier, said the Center for
Global Development think tank in a report released on Tuesday.
"We found that the lack of bank and mobile money accounts is
the biggest gap in digital readiness. It's hard to get money to
citizens who don't have either," said Anit Mukherjee, an author
of the study.