Govt urged to effect payments through mobile money
The Government could help fuel the high growth of mobile money transactions if it made payments through cell phones. PHOTO | FILE
What you need to know:
- Moody’s say, high volumes create incentives for both existing and new agents to invest in this business and, in turn, further reduce transaction costs.
- Africa has seen the world’s fastest rise in people opening new bank accounts – fuelled by mobile phone banking.
- Mobile banking technology has allowed lenders to target new customers directly with minimal transaction and overhead costs and without an extensive network of branches.
The Government could help fuel the high growth of mobile money transactions if it made payments through cell phones.
A study by research analysts Moody’s says authorities can facilitate the expansion of financial penetration by increasing volumes transacted across mobile phone platforms.
Moody’s say, high volumes create incentives for both existing and new agents to invest in this business and, in turn, further reduce transaction costs.
“Government payments through mobile accounts, such as social cash transfer payments and civil servant salaries, are examples of how authorities can facilitate an increase in volumes,” the report said.
This year, the Government has allocated Sh7.4 billion for Cash Transfer Programme to support people aged 65 years and above.
The government is providing Sh2,000 monthly to identified households in all the 47 counties.
The population of older persons globally has been increasing rapidly. According to the 2009 National Population and Housing Census, the population of older persons stood at 1.9 million and was projected to reach 3 million in 2030 in Kenya.
The Moody’s report, Banks and Sovereigns – Sub-Saharan Africa Mobile Phone Banking Supportive of Economic Growth and Banking Sector Prospects, also urges the state to give a free hand to innovation to allow the development of new products.
FASTEST RISE
“The regulator should allow companies to innovate and test their services outside the confines of strict regulation. Safaricom, for example, was offered a “no objection” letter that allowed the company to innovate and pilot test its services,” the report said.
Africa has seen the world’s fastest rise in people opening new bank accounts – fuelled by mobile phone banking.
Mobile banking technology has allowed lenders to target new customers directly with minimal transaction and overhead costs and without an extensive network of branches.
They are also able to boost their revenues by offering users access to a wider array of banking products on the mobile platform.
While the number of physical banks and staff has grown by less than a third, the number of customers shot over the roof.
One employee now serves an average of 770 customers, while in 1996 the same employee was serving an average of 60 customers.
