By Emeka Aginam

Latest study on five countries in Sub-Saharan Africa has revealed that 63 percent of respondents are unbanked, while 52 percent use mobile money through agents.

The report contained in the latest Ericsson E-commerce report looked at five Sub-Saharan countries including Nigeria, Angola, Democratic Republic of Congo (DRC), Ghana, and Uganda.

While Nigeria recorded the highest number of people with bank account among the five countries , the report basically detailed the need for financial services for everyone in the region, and how technology could help bridge the gap between the banked and unbanked in sub-Saharan Africa.

Among lower socio-economic groups in Sub-Saharan Africa, based on the report,four out of 10 people lacked basic prerequisites for starting their own mobile money account.

Although mobile money services have continued to be part of daily life of millions people in Sub-Saharan Africa, many potential customers, the report said face basic barriers to accessing the services on their own mobile phones.

Barriers

A further look at the report showed that lack of awareness and basic prerequisites, and low appreciation of the benefits were some of the hurdles limiting mobile money growth in the region.

Part of the barriers in the region, according to the report revealed that more than half of consumers in Sub-Saharan Africa, were using mobile money services through an agent, and some 20 percent use mobile money themselves on a mobile phone.

Many people not using the service, the report said perceived it as unnecessary or too complicated as banks were preferred as mobile money services providers.

However, among the lower socioeconomic groups, four out of 10 people do not meet the basic requirements for independent access such as a valid form of ID or ownership of a mobile phone. Others simply do not know about the services or consider mobile money unnecessary or too complicated, according to the new report, Financial Services for Everyone, from Ericsson ConsumerLab.

Key findings:

According to the report, consumers find cash easy to use, but the study showed that they also recognized the risk of theft and loss.

As a majority of financial activities are cash based, issues with handling cash affects all as cash usage has disadvantages such as risk of loss or theft.

Banks, according to the report are still not seen as a solution for all as 29 percent of the unbanked perceive banks to be too far away while 27 percent think they don’t have enough savings

Mobile money services, the report said were bridging the gap between the unbanked and banked as more have access to mobile money compared to banking services.

Speaking yesterday in video conferencing, Patrik Hedlund, Senior Advisor, Ericsson ConsumerLab told African journalists that among unbanked proportion of society, cash was the predominant way of receiving and making payments, as well as saving and borrowing.

Yet, since more people have mobile phones than bank accounts, mobile financial services offer a stepping stone to financial inclusion, he said.

“Consumers have to make long journeys to reach the location where they can pay their bills,” Hedlund said, adding that, “Saving money and taking loans also becomes problematic in unbanked Africa, with many hiding cash in their homes and relying on informal lenders who charge high interest rates. So, mobile money is really beneficial to them if they can use it.

“Lower income people and the unbanked are the ones who are least involved in the formal financial system, due to factors such as distance to banks, education, and the inability to authenticate their identity,”.

Interviews were also conducted with experts from the World Bank’s Consultative Group to Assist the Poor (CGAP) and the Bill & Melinda Gates Foundation.