Mobile Money 3.0? Expert says three things need to be addressed for next leap

That Kenya is the undisputed leader of mobile money in the world is not in question; 7 out of 10 Kenyans have mobile money wallets three times the global average. In three months to December 2018, Kenyans had transacted Sh3 trillion via mobile money, with mobile money accounts topping 45 million in a country of 50 million people.

Since M-Pesa ushered mobile money in Kenya 12 years ago, countless mobile money services and by-products have revolutionized how Kenya and indeed sub-Saharan Africa interacts with financial services.

From the initial use of sending and receiving money, mobile money has become ubiquitous allowing users to pay utility bills, receive wages, apply and receive micro-loans and pay for everyday goods and services. But industry insiders, governments and institutions have been mulling on what is the next big thing that will further drive financial inclusion in Africa.


Amadou Sy, who is a Senior Fellow at the Brookings Institution under the Africa Growth Initiative outlines three critical factors that need to be addressed for Africa to take the next leapfrog in financial inclusion.

1. Infrastructure Gap

Sy argues that the current infrastructure deficit in Africa – limited access to affordable internet service and electricity – needs to be addressed by policymakers to ignite the next wave of fintech capabilities in Africa.

“Policymakers in the region need to mobilize the financing needed to invest in electricity generation, transmission, and distribution, as well as in the critical internet infrastructure and the hardware and software systems infrastructure necessary to provide internet services such as fiber-optic links,” notes Sy, who adds that operational costs and factors will need to be considered to ensure sustainability.

2. Innovation vs Regulation

The rapid pace at which new fintech products are coming to market is far outpacing the speed at which regulators can develop boundaries around products and services. Although this is not a uniquely African dilemma, Sy is of the opinion that regulators should focus on specific challenges, “such as price and financial stability, consumer protection from fraud, cyber-risks and low financial literacy.”

The challenge for progressive governments, says Sy, is trying to strike a balancing act between risks and benefits against costs of regulation and supervision.

3. Impact of Fintech on employment and productivity

There is a need to explore how fintech can spur the digital economy and boost productivity, adds Sy. He is of the opinion that policymakers must elaborate policies that can leverage human capital, such as improving financial and digital inclusion. The next wave of fintech innovations will also ride on additional capital to finance innovative solutions, a factor that both private and public entities need to work on to ensure money follows opportunities in fintech.

“Similarly, policymakers will need to assess how competition in different sectors will affect the landscape of a future e-economy.”