The rapid growth of mobile money in East Africa is a phenomenon which has few precedents in the region’s financial and banking history and has far reaching implications on transactions. Four main areas of focus: The history and growth of Mobile Money; The financial sector; Business; and Influence on transactions

1. Influence of Mobile Money on
Transactions in Africa, Focus on East
Africa
Kelvin Kizito Kiyingi
Assistant Director, Communications Department
Bank of Uganda
Cash Cycle Seminar Beirut Lebanon
November 2015

2. 2
The rapid growth of mobile money in East Africa is a phenomenon
which has few precedents in the region’s financial and banking
history and has far reaching implications on transactions.
 Main Areas of Focus:
 The history and growth of Mobile Money
 The financial sector
 Business
 Influence on transactions

3. 3
History & Growth of Mobile Money
 Kenya: 2007 (Safaricom); it is now used by at least 70% of
households
 Last year, the value of mobile money transactions was more
than $20 billion.
 Tanzania: 2007 (E-Fulusi); (T) Ltd pioneered
 Interoperability; across all platforms
 September 2013, the Bank of Tanzania reported 30.3 million
registered mobile money users
 Uganda: 2009 (MTN);.
 Value of mobile transactions about $6 billion
 Number of mobile money accounts 18.59 million
 Number of account holders in all commercial banks, 6 million
 Mobile phone subscribers, banked or
unbanked, deposit value into their mobile
account/virtual account to enable transactions
 It is a form of branchless banking
 Mobile money is purchased for cash from a
mobile agent.
Once e-value is obtained one can:
 Withdraw cash from an agent
 Transfer funds, even to unregistered users
 Pay bills, for goods and services
 Purchase mobile airtime for self or others
 ATM withdrawal
 Pay salaries, welfare payments
 Loan repayments
 Foreign remittances

4. 4
Transactions via Mobile Money
Kenya is ranked the
biggest economy in
East Africa with a GDP
of $61 billion
followed by Tanzania
($49 billion),
Uganda ($26 billion)
and Rwanda
($8 billion)
Source:
World Bank statistical
July 2015.
Source: The East African

5. Financial Sector
 There is a difference between mobile banking and mobile money
 Mali, Pan-African Ecobank partnering with Orange Cameroon to transfer
cash between two services. Four other countries
 Nigeria, GT Bank with Etisalat, create GTEasysavers, saving account via
mobile phones.
 Kenya, competition between Equitel and Safaricom
 In general, banks have entered the fray and offering new services
 The financial sector has been revolutionarised
5

6. 6
 Participation in the infrastructure bond in
Kenya: 23 million people in Kenya with mobile
money accounts. Ordinary Kenyans given
chance to climb the investment ladder.
 Mobile Money as collateral in Kenya and
Tanzania
 Transferring money from Rwanda (Francs) to
Uganda (in Shillings) via MTN
 Use of several mobile applications like the
“Wave”.
Business
Kenya: M-Pesa agents are more
prevalent per capita than ATMs in the
United States

7. 7
Communication: Tools and Channels
 Mobile Money Guidelines issued by Bank of Uganda
 Public Education on the use of mobile money
 Communications Strategy: Know Your Rights
 Regional Sensitization Workshops
 Media seminars & workshops
 Social Media, Internal communication
 Financial Consumer Protection Consultation Group

8. 8
Transactions in East Africa
“Millions of people send and save money with M-Pesa – and it’s a great
idea that started here in Kenya”
 In 2014, Consumers in Kenya, Uganda, Rwanda and Tanzania
transacted $45.75 billion through their mobile phones
 This is equivalent in value to 32 per cent of their combined gross
domestic product — up from $4.86 billion or 3.4 per cent of GDP in
2009.
 In East Africa, there are 24 mobile money service providers across
the region; Safaricom’s M-Pesa is ranked the biggest.
 Mobile money is a tool for strengthening social capital in East
Africa, allowing families and friends to share financial burdens.
 Mobile money has evolved beyond cash transfers
Source: GSMA Africa
President Barack Obama
Global Entrepreneurship Summit,
Nairobi, 2015

9. 9
Yet to take off in some countries
 Poor technology and infrastructure (disruptive innovation):
 Flexible regulatory framework, which aims to protect consumers while
allowing innovation.
 Central Bank of Kenya and Bank of Tanzania crucial
 Microfinance organizations have lowered interest rates due to a
reduction in collection costs via mobile money.
 South Africa:
 Better developed financial infrastructure
 Regulatory regime
First of all, in the absence of a special dispensation for non-banks or
e-money providers (which is the approach taken by the Tanzanian authorities,
for example), payments providers in South Africa are treated as banks and
subject to the full regulatory compliance requirements (and costs) associated
with this.
Why mobile money
has flopped in SA

10. Statistics to consider
 The following three slides show the influence of mobile
money in Uganda:
 Slide 11: Number of mobile money clients Vs. Number of transactions
 Slide 12: Broad Money Vs. Value of mobile money transactions
 Slide 13: Annual transactions in mobile money Vs. Uganda National Inter-
bank Settlement System
10

11. 11
Uganda: mobile money users and transactions
Source: Bank of Uganda2.84
28.82
57.3
241.73
399.46
496.25
0.55
1.68
2.61
8.87
14.24
18.59
0
5
10
15
20
25
0
100
200
300
400
500
600
2009 2010 2011 2012 2013 2014
Numberofregisteredcustomers(million)
Numberoftransactions(million) Uganda: Number of mobile money clients and transactions
Number of transactions (millions) Number of registered customers (millions)
Source: Bank of Uganda

12. 12
Source: Bank of Uganda
5,332.44
7,397.65
7,762.54
8,844.41
9,583.00
11,081.07
3.24
14.97
44.65
131.76
178.20
231.92
-
50
100
150
200
250
300
0
2,000
4,000
6,000
8,000
10,000
12,000
2009 2010 2011 2012 2013 2014
ValueofMMtransactionsinbillionsofShillings
BroadMoneyinbillionsofShillings
Broad Money-M2 Value of MM transactions
Uganda: Broad Money and Value of MM transactions in billions of Shillings (2009 – 2014)
Source: Bank of Uganda

13. Annual Transactions in Mobile Money and the Uganda Inter-bank Settlement System
13
153.2
195.7
235.0 227.3
4.5
13.2
19.5 23.2
2.94%
6.75%
8.30%
10.21%
0%
2%
4%
6%
8%
10%
12%
0
50
100
150
200
250
2011 2012 2013 2014
ProportionofMMofUNISS
ValueinShillings(Trillions)
Year
Value of UNISS Transactions Value of MM Transactions ProportionSource: Bank of Uganda

14. 14
 In 2014, the value of settlements via the UNISS was UGX227 trillion,
including RTGS; mobile money transactions were UGX23 trillion.
 The value of mobile money transactions was equivalent to 10% of UNISS
settlements in Uganda.
 In 2014, Broad Money was UGX11 trillion, mobile was UGX231.92 billion,
which is about 2% of Broad Money.
 It is impossible to measure transactions made in cash
 Therefore, mobile money is much more important as a medium of
exchange than a store of value.
Conclusion

15. 15
But I think that we are probably still only at
the beginning of the transformation which
mobile banking will create in our economy
and society.
-Prof. Emmanuel Tumusiime-Mutebile,
Opening Remarks, February 2015
The rapid growth of mobile money in East Africa is a phenomenon
which has few precedents in the region’s financial and banking history
and has far reaching implications.
 History & Growth: Impressive growth
 The financial sector: The writing is on the wall
 General public: Paying for utilities in smaller quantities
 Impact of Mobile Money: is an important medium of exchange.
 However, not yet very important as a store of value; cash is still
king.
Recap