Financial Sector Development in Africa: Opportunities ... - World Bank

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46 Porteous over the next decade, Africa will become a continent with a critical mass of people “wired” for Internet access. While this may still seem unthinkable, it was unthinkable a decade ago that more than half of Africans would today have mobile phones. The State of Play in Mobile Financial Services In 2010, research group Gartner estimated that there were 100 million mobile payment users worldwide, with disproportionate representation in Africa and Asia (Gartner 2010). This is a small fraction of the 4 billion mobile subscribers, but the absolute number and the percentage are expected to increase rapidly over the next few years as services become better known and more widely accessible. There are now few countries, even in Africa, where basic mobile financial service is still not available. Equally, however, in Kenya and South Africa, the scale of usage exceeds a million active customers—a substantial fraction of the population—although recent deployments in countries such as Uganda, Tanzania, and Ghana make usage there likely to reach these same levels. Many more rollouts are planned or in their early stages: more than half (38) of the worldwide mobile money deployments tracked by the GSMA Deployment Tracker are in Africa. 4 Because the tracker focuses on telecommunication-linked deployments, this count is likely understated. Early Models and How They Have Evolved In this section, we will characterize the first- and second-generation models in Africa through the eyes of three successful models in three different African countries: first, a bank (First National Bank, or FNB, in South Africa); second, a third-party provider (Celpay’s Zambia operation, which evolved out of a mobile network operator or MNO); and finally an MNO (M-PESA offered by Safaricom in Kenya), as shown in table 2.2. All three examples today report having a profitable and sustainable mobile channel, albeit all three are very different in scale, scope, and focus. New players have been spurred to enter the sector because of these players’ success, so these three have served as demonstration cases of their respective approaches. Banks were first-generation early adopters of the mobile phone as an additional banking channel, but they seldom drove adoption of this new channel among customers. During the past decade, most African retail banks of any size have introduced a mobile channel, much as they all
Table 2.2 African First- and Second-Generation Models First generation Second generation Measure First National Bank Celpay Safaricom Country of origin South Africa Zambia Kenya Year started 2005 2001 2007 Number of registered clients (2010) 2 million 10,000 10.2 million Type of entity Licensed bank Third-party payment provider Mobile network operator Mobile financial Channel of a regulated bank Payment system business under Not regulated—operates under no objection service regulated as the National Payment System Act Service offerings Bank account with alerts, notifications, bill pay, airtime purchase and person-to-person notices to registered beneficiaries only; also debit card Business-to-business, electronic transfers for small and medium enterprises and one-man businesses using mobile wallet Mobile wallet offering person-to-person transfers to any cell number, bill payment, and bulk payment Business-to-person offerings (such as salaries, microfinance institution loans, and charitable support) Strategic drivers Making marginal clients viable Making payment processes work for logistical chains Source: Author. Reduce churn Increased average revenue per user At least break even on costs 47
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lic Disclosure Authorized Public Di
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Financial Sector Development in Afr
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Contents Foreword Acknowledgments E
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Contents vii PART III Safeguarding
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Contents ix 4.4 Size of Mortgage Lo
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xii Foreword In their own way, each
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xiv Acknowledgments led by Stefan N
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Page 22 and 23: xx Abbreviations FSB FSD FSDT FSI G
Page 24 and 25: 2 Beck and Maimbo to the bottom of
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Page 29 and 30: CHAPTER 1 Microfinance in Africa Al
Page 31 and 32: Microfinance in Africa 9 Figure 1.1
Page 33 and 34: Microfinance in Africa 11 A Special
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Page 37 and 38: Microfinance in Africa 15 Impedimen
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Page 41 and 42: Microfinance in Africa 19 to physic
Page 43 and 44: Microfinance in Africa 21 Understan
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Page 49 and 50: Microfinance in Africa 27 world reg
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Page 53 and 54: Microfinance in Africa 31 Financial
Page 55 and 56: Microfinance in Africa 33 situation
Page 57 and 58: Microfinance in Africa 35 have yet
Page 59 and 60: Microfinance in Africa 37 9. This i
Page 61 and 62: Microfinance in Africa 39 Ehrbeck,
Page 63 and 64: CHAPTER 2 Mobile Financial Services
Page 65 and 66: Mobile Financial Services in Africa
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96 Coates and Hofmeister Technical
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98 Coates and Hofmeister agree to b
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100 Coates and Hofmeister Box 3.3 C
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102 Coates and Hofmeister Attitudes
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104 Coates and Hofmeister developin
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106 Coates and Hofmeister specifica
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108 Coates and Hofmeister ———
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CHAPTER 4 Housing Finance Simon Wal
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Housing Finance 113 Figure 4.1 Mort
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Housing Finance 115 countries, down
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Housing Finance 117 • The housing
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Housing Finance 119 limited to a fe
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Housing Finance 121 housing and inf
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Housing Finance 123 borrowed by ext
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Housing Finance 125 Box 4.1 Afforda
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Housing Finance 127 Box 4.2 South A
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Housing Finance 129 the degree to w
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Housing Finance 131 markets is the
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Housing Finance 133 are unable to o
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Housing Finance 135 greenfield vent
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Housing Finance 137 Figure 4.5 Obst
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Housing Finance 139 changes in the
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Housing Finance 141 • Introduce a
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Housing Finance 143 Box 4.6 Progres
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Housing Finance 145 of the impact o
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Housing Finance 147 funds. Within s
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Housing Finance 149 Hassler, O., an
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CHAPTER 5 The Reform Agenda for Fin
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The Reform Agenda for Financial Reg
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PART IV Financial Sector Reform: Ac
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180 Dafe lack access to external in
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182 Dafe having a positive theory o
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184 Dafe In sum, high transaction c
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186 Dafe through the selective allo
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188 Dafe institutions of the indust
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190 Dafe the boundaries of informat
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192 Dafe range of examples of both
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194 Table 6.1 Period Since the end
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196 Dafe state-owned financial inst
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198 Dafe The degree of success, in
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200 Dafe Although the current conse
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202 Dafe The interdependence of the
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204 Dafe in the 1980s and 1990s wer
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206 Dafe Alternative Approaches to
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208 Table 6.2 Approach to explain/
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210 Dafe state-centered, and interd
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212 Dafe particularly important fac
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214 Dafe Table 6.3 (continued) Mana
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216 Dafe activism in the developing
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218 Dafe structures can undermine m
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220 Dafe Conclusion There is strong
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222 Dafe policy is not straightforw
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224 Dafe banks that open agents in
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226 Dafe Bankable Frontier Associat
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228 Dafe Goldsheid, R. 1958. “A S
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230 Dafe ———. 2001. Types of
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