The opportunities and challenges of promoting inclusive financial services through mobile money : the case of MTN mobile money in Uganda

Mitchell, Corin Sebastian (2011-12)

Thesis (MDF)--Stellenbosch University, 2011.


Perhaps the African equivalent to the industrial revolution is the mobile revolution we’ve witnessed over the past decade. Specifically the innovation and extraordinary growth of mobile money, mobile technology platforms and ongoing service offerings to millions of otherwise mostly precluded people. The potential for these technologies coupled with latent untapped user demand across sub-Saharan Africa to catalyse investment, crowd in competition and financial service providers and as a result push financial inclusion through access and use, is vast. Link these reasons with the ever sought after global demand for ‘increase in shareholder value’ and it can easily be seen why mobile operators are continuously expanding, partnering with banks and predominantly expanding in emerging and frontier markets in sub-Saharan Africa. This research report explores MTN MobileMoney in Uganda as the case in point; possibly one of the most exciting and rapidly growing platforms in Africa. The research reveals that whilst profitable, it is a very competitive business with tight margins. Continuous education is critical if people from all walks of life are truly to benefit and scale is to be reached to make it even more profitable when servicing the ‘unbanked’ and bottom of the pyramid. Uganda and other countries too, should think strategically about introducing national identity documents, or equivalent, to ensure they maximise the potential ease and reach of technology that can have real and relevant development benefits to people – especially the under-served and poor. Not doing so merely serves as disadvantageous. Broader benefits of mobile money and mobile transactions go far beyond purely the individual user, and include the country’s economy as a whole, providing convenience to corporate as well as small businesses and individuals – the anywhere, anytime factors. Benefits accrue to businesses, and to government, in terms of cost efficiencies and paying large numbers of staff, increased safety and security in a less cash dependent economy. There is significant local and international demand for innovation and new product offerings, driving mobile operators globally and in emerging and frontier markets in particular. There are a number of key factors that make mobile money a commercial success; it’s not just about churn reduction. These factors are explained and explored in this research report. Specifically when data was gathered from MobileMoney users there were no immediate or unexpected surprises. However, what was striking and reassuring was the positive attitude and experience of users, as well as what appears to be latent demand for more services and users’ trust in MTN to provide these.

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