Central banks in some African countries hamper financial development by failing to get to grips with the emergence of non bank-led services, a UN representative told a Financial Times conference.
The newspaper reported comments from Mukhisa Kituyi, secretary general of the UN Conference on Trade and Development (pictured), stating regulators in several African markets did not have an adequate understanding of the modern financial sector – including mobile money services.
He added many authorities were only just beginning to realise financial services were no longer based around bricks-and-mortar banks and, as a result, were not regulating the sector properly.
Although operator-led services are hailed for driving access to financial services among unbanked populations in countries such as Kenya, regulation and adoption varies wildly within Sub-Saharan Africa.
In the GSMA’s 2017 State of the Industry Report on Mobile Money, released at Mobile World Congress 2018, the association estimated the launch of mobile money services in countries without “enabling regulation” suffer from “activity rates 30 per cent lower on average than those with an enabling regulatory environment.”
It added non-enabling rules “can stifle investment, limit the rollout of new services, and raise costs for consumers, all of which can negatively affect activity rates.”
The GSMA estimated 66 per cent of the combined adult population of Kenya, Rwanda, Tanzania and Uganda use mobile money services on a regular basis.
In contrast, a report in Nigerian newspaper Business Day in February reported the country had 2.3 million mobile money users – less than 3 per cent of the adult population.