Vodacom, Vodafone, and Safaricom, in partnership with the United Nations Development Programme have released a policy paper, “Digital Finance Platforms to empower all“. The paper highlights how the companies are accelerating the SDG impact of digital financial inclusion in Sub-Saharan Africa. The paper was authored by Sitoyo Lopokoiyit, CEO of M-PESA Africa and Chief Financial Services Officer at Safaricom and Aiaze Mitha, Global Lead, Digital Finance for the SDGs, UNDP / UNCDF.
The paper has highlighted that in Africa, mobile financial services are paving the way for financial inclusion and broader Sustainable Development Goals (SDGs).
In Ghana, Tanzania, Kenya, and Mozambique, thanks to M-PESA, 17.6 million users can access a formal financial ecosystem, and 12.3 million users can secure credit, for the first time.
Some of the key findings in the policy paper include:
– Financial Inclusion (SDG target 8.10)
M-PESA, launched in 2007, now has 52 million active users, offering financial services that many of its customers would otherwise not be able to access. In 2022, it provided 12.3 million users across Kenya, Tanzania, Mozambique, and Ghana with first-time access to credit. Around 17.6 million users in these four markets did not have access to any formal financial services before they got M-PESA, which shows that such platforms are often the first step to entering a formal financial system. Impacts were highest among rural individuals and those in lower socio-economic groups. Additionally, looking at the mobile solutions offered by Vodacom, we found that 48% of surveyed South Africans had access to loans that they would not easily be able to access if not for Vodacom.
– Economic Growth (SDG target 8.2)
Countries with successful mobile money adoption see an average annual growth rate in per capita GDP that is 1 percentage point higher than in countries where mobile money adoption was not successful or not introduced. Almost every business surveyed (98%) agreed that M-PESA helps them carry out their business tasks by facilitating
faster and safer payments and by enabling the sale of goods and services online. In fact, 95% of these business users rely on M-PESA for at least half of their financial business transactions.
– Poverty Reduction (SDG target 1.2)
Thanks to mobile money services, there were around 1.7 million fewer people living in poverty in 2019 across Kenya, Tanzania, Mozambique, and Ghana.8
If M-PESA didn’t exist, 57% of its users feel they would have less money available to them.
– COVID-19 and Well-being Impact (SDG target 3.4)
Of those surveyed, 91% of people and 94% of businesses agreed that M-PESA helped them stay safe during the pandemic, largely by reducing the need to
handle cash and enabling the purchase and sale of goods and services online. Additionally, most people (72%) agreed that Vodacom South Africa’s mobile solutions helped them manage their finances better and a similar proportion felt it contributed to improved well-being.
Many people face harsh realities tarnishing their interaction with formal financial systems, making it near impossible for them to get access to more advanced and sophisticated financial services, like credit or insurance. This impacts people’s resilience to economic shocks and prevents them from breaking free from the cycle of poverty.Aiaze Mitha, Global Lead, Digital Finance for the SDGs, UNDP / UNCDF
M-Koba has transformed my life. It has also transformed the lives of so many others. In my community, people can now get loans through M-Koba without having to go to the bank and fill out any forms. And it’s convenient because you can get a loan at any time – even in the middle of the night!Domician Mkama, M-PESA customer
Mobile financial services deliver a range of positive societal impacts, as highlighted in these key findings and in the existing literature.