The expansion of digital financial services has been a major driver of recent financial inclusion gains in Africa.
Between 2014 and 2017, digital financial inclusion13 in sub-Saharan Africa14 increased, while financial inclusion through traditional (non-digital) channels stalled (Sahay et al., 2020). By 2017, an average of 42% of the population aged 16 and over owned an account at a financial institution or a mobile money service provider in Africa, compared to just 30% in 2014 (World Bank, 2017). Africa now has 560 million registered mobile accounts, which mobilised almost $0.5 trillion in 2020, representing 65% of total worldwide mobile transactions (GSMA, 2021a).
Figure 1: Value of mobile money transactions in Africa, 2017–2020, monthly data for December
Source: GSMA, 2021b.
Mobile money is playing a key role in the development of digital financial services in Africa, by either complementing or supplementing existing financial service providers. The use of mobile money increased by more than 200% across the continent between December 2015 and December 2020, with an increase every year in most regions (Figure 1). Sub-Saharan Africa is the world leader in mobile money accounts, with 53% of active mobile money accounts worldwide (160 million accounts) and almost two-thirds of the $70 billion worth of worldwide transactions that were executed during December 2020 (GSMA, 2021a, 2021b)15. The success of mobile money in Africa can be partly attributed to its greater accessibility relative to traditional financial service providers: there were 109 times more active mobile money account outlets than commercial bank branches per 100 000 adults in 2019 (IMF, 2020a)16.
13 Financial inclusion is measured as access and usage of financial services (IMF, 2020b).
14 Khera et al., 2021 paper refers to Africa, but all the African countries it covers are in sub-Saharan Africa.
15 Active refers to the accounts which have been active in the last 30 days (monthly data from December 2020).
16 Based on average from latest available data on African countries.
Figure 2: Commercial bank depositors, active mobile money accounts, mobile money and internet banking transactions in 2019
Source: IMF, 2020a17.
17 Latest available data are used. North Africa and Central Africa are excluded due to limited by-country data. For Southern Africa, data on South Africa, Eswatini and Madagascar are unavailable. Angola and Lesotho are missing data for the value of mobile and internet banking transactions, while Angola is also missing data for the number of active mobile money accounts. For West Africa, data on Ghana, Nigeria and Sierra Leone are unavailable. Cabo Verde and Mauritania are missing data for the value of mobile money transactions. Benin, Burkina Faso, The Gambia, Guinea-Bissau, Liberia, Niger and Togo are missing data for the value of mobile and internet banking transactions. The Gambia and Liberia are also missing data for the number of depositors with commercial banks, while Cabo Verde and Mauritania are missing data for the number of active mobile money accounts. For East Africa, data on Burundi, Ethiopia, Sudan and Tanzania are unavailable. Djibouti, Kenya, South Sudan and Uganda are missing data for the value of mobile and internet banking transactions, while Djibouti and South Sudan are also missing data for the value of mobile money transactions. Kenya, Djibouti and South Sudan are missing data for the number of active mobile money transactions, while Kenya is also missing data for the number of depositors with commercial banks. In addition, data for Mauritius, Mozambique, Seychelles and Zimbabwe are not considered as they were extreme outliers in one or more variables.
0 100 200 300 400 500 600 700
East Africa West Africa Southern Africa (no data for South Africa) Average Number of depositors with commercial banks per 1,000 adults
Average Number of active mobile money accounts per 1,000 adults
0 10 20 30 40 50 60
Southern Africa (no data for South Africa)
West Africa East Africa
%
Average Value of mobile money transactions (% of GDP) Average Value of mobile and internet banking
transactions (% of GDP)
In many countries there is an uptake of mobile money services despite widespread access to traditional banking services; in some countries, though, mobile money is making up for weak access to traditional lenders.
On average, the correlation between access to commercial bank accounts and mobile money is positive, including in a number of Southern African countries such as Namibia and Botswana, which combine relatively high levels of access to traditional banks with high use of mobile money (Figure 3). In East and West Africa, by contrast, mobile money services appear to be remedying weak access to traditional finance. These regions are characterised by relatively large volumes of mobile money transactions, in total and on a per capita basis (Figure 1), and relatively weak access to accounts with traditional financial service providers (Figure 2). In countries such as Burkina Faso, Côte d’Ivoire and Rwanda, relatively poor access to commercial banking services has most likely driven the strong uptake of mobile money. The picture is different in North African countries and in South Africa, where a higher proportion of the population has access to traditional financial services. This may explain the limited uptake of mobile money, which in the case of South Africa drives the low per capita volume of mobile money transactions in Southern Africa (as seen in Figure 1).
Figure 3: Commercial bank depositors and mobile money accounts, by country
Source: IMF, 2020a18.
Commercial banks also offer digital channels to their customers. The available data are limited but suggest that Southern African banks even outside South Africa (but excluding the Seychelles and Mauritius) are already providing significant digital service offerings, with mobile and internet banking transactions accounting on average for almost 50% of gross domestic product (GDP) in 2019 (Figure 2). East and West Africa appear less advanced, although this could reflect the lack of data for the most developed markets (Nigeria and Kenya). It should be noted that the expansion of digital service offerings by traditional banks does not necessarily indicate reaching out to new customers — in many cases it more likely reflects increasing sophistication of the services offered to existing clients, who are already relatively well served.
18 Latest available data are used. Mauritius, Mozambique, Seychelles and Zimbabwe are excluded because they were outlier data points.
Algeria, Angola, Burundi, Cabo Verde, Cameroon, Central African Republic, Republic of the Congo, Democratic Republic of the Congo, Djibouti, Equatorial Guinea, Ethiopia, Gabon, The Gambia, Ghana, Kenya, Liberia, Madagascar, Mauritania, Mauritius, Morocco, Mozambique, Nigeria, Seychelles, Sierra Leone, South Africa, South Sudan, Sudan, São Tomé and Príncipe, Tanzania, Tunisia and Zimbabwe are not included because they are missing values for at least one of the two variables.
TCD
Number of depositors with commercial banks per 1000 adults
Number of active mobile money accounts per 1 000 adults Central Africa East Africa North Africa Southern Africa West Africa