Mobile money providers may earn an estimated $1.5 billion USD in fees in sub-Saharan Africa by 2019 as Africans have taken to the use of mobile financial services to pay utility bills, take out loans and send money to relatives, in a press release by Boston Consulting Group.
According to the release, “With the population in sub-Saharan Africa growing and becoming wealthier, the number of people aged 15 or older with an individual annual income $500 or more will rise to more than 460 million by 2019. This trend is likely to strengthen as governments in sub-Saharan Africa increasingly focus on their education, health, and security systems—enhancing the potential for long-term economic growth in their countries. According to BCG, by 2019 there will also be some 400 million unique mobile-phone subscribers and almost 150 million traditionally banked sub-Saharan Africans. That will leave some 250 million sub-Saharan Africans aged 15 or older who have incomes of $500 or more and mobile phones but no traditional bank account. This gives a sense of the potential market for mobile financial services.”
Hans Kuipers, a BCG partner and coauthor of the report said, “Mobile financial services aren’t new, but they’re at an inflection point and adoption is accelerating. This is not something that African banks or MNOs can afford to ignore. A bank or MNO that isn’t active in the market runs the risk of becoming less and less relevant.”
To have this all play out, banks and Mobile Network Operators will need to invest in its infrastructure, business capabilities, and governance.
The Boston Consulting Group is a global management consulting firm on business strategy.