Out-Law News | 28 Aug 2014 | 2:48 pm | 1 min. read
The project is part of a $37.4m joint initiative of IFC and The MasterCard Foundation to expand microfinance and advance mobile financial services in sub-Saharan Africa.
According to the IFC the overall aim of the three-year ‘Partnership for Financial Inclusion’ project is to help Airtel Money Zambia build “a sustainable mobile money operation”. IFC will provide market research and advisory services on agent network management and business strategy development.
Airtel Money director Zambia Brenda Thole said: “A key focus area for Airtel Money is to support the (Zambian) government’s mandate to enhance financial inclusion and to reach out to the unbanked population who may still have fears of mainstream banking or believe the services are too costly. This partnership with IFC and The MasterCard Foundation will boost our drive of customer education and help us build strong agent relationships, which are key to the success of this product.”
Airtel Networks Zambia Plc is a subsidiary of Bhakti Airtel, which the IFC said is the fourth largest telecommunications company in the world with 300 million customers. The Zambian subsidiary has been operational in the country since 2010 after the buy-out of Zain. According to the IFC, the company “has the widest geographical footprint in Zambia with over 1,100 sites spread across Zambia”.
The IFC said the implementation of mobile financial services has proved “to be a successful way of increasing access to finance in several African markets”.
According to the IFC, M-Pesa in Kenya is “one of the most well-known mobile money operators in the world” and is used by more than 70% of Kenyan adults. In Tanzania, the IFC said data from mobile operator FinScope showed that the use of mobile money services had helped increase the rate of financial inclusion from 15.8% to 57.4% in just four years.
In May 2014, the IFC announced a $2m advisory services agreement with Tigo Ghana to develop and expand mobile financial services in Ghana. That project was also a joint initiative under the Partnership for Financial Inclusion, which is supported by the Bill & Melinda Gates Foundation, the Development Bank of Austria and which collaborates with knowledge partners such as the World Bank and the Consultative Group to Assist the Poor.
A survey published this year by Swedish company Ericsson (8-page / 224 KB PDF) said sub-Saharan Africa is “rapidly closing in” on the global penetration rate of mobile communications usage. According to the survey, mobile financial services are increasingly popular as the use of information and communications technology (ICT) grows.
However, the survey said: “Mobile operators and relevant ICT stakeholders, including governments, must drive the development of appropriate infrastructure to handle the growing traffic demand on networks.”