MOBILE MONEY

NOTE 2019
MOBILE MONEY: LEADING THE WAY
IN FINANCIAL INCLUSION
Mobile money is a pay-as-you-go digital medium of
exchange and store of value using mobile money accounts
which is typically offered by a mobile network operator
(MNO) or another entity in partnership with an MNO. It has
had a profound impact on the way people access finance,
particularly in countries without deep banking penetration
and with poor infrastructure.

Mobile money offers a novel way to access financial services,

especially for individuals who do not have access to traditional
banking services, as the only requirement is a basic mobile
phone. Customers need to register with a mobile money agent
to obtain an individual virtual account linked to their mobile
phone number and accessible through a SIM card. Users can
carry out financial transactions—including making peer-to-
peer transfers, bill payments, in-store purchases, remittances
and savings—across mobile money accounts through the data
messaging channel. In select countries, microcredit is also
offered via mobile money. Studies suggest that, as mobile
money reaches scale, new and enhanced services including
credit and insurance may be offered through this channel on a
larger scale (GSMA, 2018a).

BOX. Mobile money is different from mobile

wallets and mobile banking
There is an important distinction between mobile
money and other digital financial services such as
mobile banking and mobile wallets. The latter two
are linked to traditional bank accounts while mobile
money is not.
• Mobile banking is the use of an application on
a mobile device to access and execute banking
services, such as check deposits, balance inquiry,
and payment transfers.
• Mobile wallet consists mainly of an application
installed on a mobile device, such as a smart
phone, which stores credit/debit card information,
coupons, or bank account information and
enables customers to make in-store purchases,
online payments, peer-to-peer transfers etc.
MOBILE MONEY DEVELOPMENTS
IN AND BEYOND EASTERN AFRICA
After initial success in Kenya, Tanzania and Uganda
(see Table 1), mobile money has spread beyond East Africa.
M-Pesa—launched in Kenya in March 2007 by Safaricom
(part of the Vodafone group)—now has almost 30 million
users in 10 countries (Monks, 2017). There are now 276 live
mobile money services across the world with over 689 million
registered mobile money accounts and 5.3 million registered
mobile money agents (GSMA, 2017a).

TABLE 1. East African countries have been the pioneers of

the mobile money revolution
Value of mobile money transactions during
the reference year (percentage of GDP)
Kenya Tanzania Uganda
2009 23 2 2
2013 44 51 35
2017 47 52 62
Note: For Tanzania the latest data shown is for 2015.
Source: Financial Access Survey and IMF staff calculations.

Other parts of the African continent are fast catching up

(see Figure 1). One of the biggest drivers of mobile money in
West Africa is Ghana where the number of registered and active
mobile money accounts has grown fivefold and elevenfold,
respectively, between 2013 and 2017.

FIGURE 1. Registered mobile money accounts in select

African Regions (Number per 1,000 adults)
1,200
2013 2017
900

600

300

0
Eastern Western Southern Middle
Africa Africa Africa Africa
Source: Financial Access Survey and IMF staff calculations.

While mobile money growth shows no sign of ebbing in

Sub-Saharan Africa, other regions of the world are not far
behind. South Asia showed the highest growth in mobile money
accounts in 2017 and constitutes 34 percent of all registered
accounts globally (GSMA, 2017a, see Figure 2). Bangladesh,
Indonesia, Pakistan, and Philippines are some examples of
countries experiencing high mobile money growth in Asia.

FIGURE 2. Registered mobile money accounts by regions

(Number per 1,000 adults)
600

2013 2017
450

300

150

0
Sub-Saharan East Asia Europe & Latin America South Asia Middle East
Africa & Pacific Central Asia & Caribbean & North Africa

Source: Financial Access Survey and IMF staff calculations.

GROWING IMPORTANCE OF
MOBILE MONEY IN FRAGILE STATES1
Mobile money has proven to be a viable alternative to formal
financial services in fragile states—where achieving financial
inclusion is challenging. Currently, more than half of the
42 fragile states have mobile money services. In these states,
on average, for every commercial bank branch there are close
to 47 mobile money agents, providing the population an
additional way to access finance (see Table 2).

TABLE 2. Reach of mobile money in fragile states is wider

than banks

Fragile states where the ratio of mobile money agents

to commercial bank branches are the highest
Guinea 174
Papua New Guinea 131
Zimbabwe 116
Mali 95
Guinea Bissau 64
Togo 59
Source: Financial Access Survey and IMF staff calculations.
Note: Data for Papua New Guinea is from 2015, rest from 2017.

1 The IMF defines fragile states (FS) as having either weak institutional capacity
measured by the World Bank Country Policy and Institutional Assessment
(CPIA) score (average of 3.2 or lower) and/or experience of conflict (signaled
by presence of a peace-keeping or peace-building operation in the most
recent three-year period).
Moreover, the growth in mobile money agents in these areas
far exceeds the growth in traditional financial access points like
bank branches. In fragile states, from 2015 to 2017, while the
number of commercial bank branches per square kilometer
remained less than 2, the number of mobile money agents per
square kilometer increased from 18 to 27. This increase in fragile
states corresponds to a growth rate of 50 percent, compared to
16 percent in non-fragile states.

In addition, between 2015 and 2017, mobile money accounts

in these states almost doubled while the value of money
transactions carried out on these accounts have grown by more
than three times (see Figure 3).

FIGURE 3. Uptake of mobile money in fragile states

has accelerated
350 16

300 Number of mobile 14

money accounts
per 1,000 adults 12
250 (Left axis)
10
200
8
Value of mobile
150 money transactions
as percent of GDP 6
(Right axis)
100
4

50 2

0 0
2015 2016 2017

Source: Financial Access Survey and IMF staff calculations.

Note: Data includes 16 fragile states reporting these two indicators to the FAS.

THE DRIVERS BEHIND THE

RISE OF MOBILE MONEY
Efficiency and safety for users
Drivers behind the rapid up-take of mobile money include a
relatively safe and affordable store of value and means of funds
transfer. Mobile money can also facilitate efficient informal risk-
sharing networks—by enabling timely transfers of small amounts
of money among family/community members in times of
financial distress. This in turn allows households to smooth their
consumption and make more efficient investment decisions
(Jack and Suri, 2011).
Public sector efficiency gains
Governments in several countries are also increasingly relying
on mobile payment services because of its low-cost nature (see
IMF, 2017). For example, in 2016, the Government of Liberia
partnered with Mobile Solutions Technical Assistance and
Research (mSTAR), a USAID program, to disburse teacher’s
salary through mobile money. The initial pilot in Nimba County
showed the potential to reduce costs and travel time by
84 percent (USAID, 2017). The mobile money salary payment
program has since been adopted by several ministries in the
country, including health and education.

The widespread use of mobile money in Kenya has also in

part been supported by government efforts, such as digitizing
payments for government services. Research shows that
more than 90 percent of transactions on eCitizen—the official
government payment platform in Kenya—are made using mobile
money (GSMA, 2017b).

Targeted policies to promote mobile money

and safeguard financial stability
Some countries have also adjusted the regulatory environment
to promote the use of mobile money. For example, in Ghana,
the central bank issued new guidelines on agents permitting
MNOs under central bank supervision, to own and operate
mobile money networks. This likely provided greater incentives
for MNOs to make crucial investments and recruit agents
(Mattern, 2018). Indeed, the aforementioned rapid growth
in mobile money accounts in Ghana seems to have been
supported by regulations enabling wide network of mobile
money agents.

As mobile money continues to expand, governments must

also strengthen their consumer protection and regulatory
frameworks to maintain financial stability. In fact, several
countries, including Kenya, Myanmar and Jordan, are already
balancing the benefits of fast-growing mobile money use with
new regulations requiring formal authorization of new services
providers and holdings of 100 percent of mobile money
liabilities in liquid assets (GSMA, 2018b).
ABOUT MOBILE MONEY DATA IN FAS
The Financial Access Survey (FAS) is a supply-side dataset
on access to and use of financial services, including mobile
money. The FAS started collecting data on mobile money in
2014. The source of the mobile money data is administrative
data obtained from the regulators of mobile money service
providers. The FAS is the only global database that collects
and disseminates annual mobile money data at the country-
level. Currently, there are close to 90 economies in which
mobile money services are available (GSMA, 2017a), out of
which 66 report data to the FAS.

The FAS is currently supported by the IMF’s

Data for Decisions (D4D) Fund, which was
launched in June 2018.

REFERENCES
1. GSMA. 2017a. State of the Industry Report on
Mobile Money.

2. GSMA. 2017b. Person-to-government (P2G) payment

digitization: Lessons from Kenya.

3. GSMA. 2018a. Mobile Money Policy and

Regulatory Handbook.

4. GSMA. 2018b. Mobile Money Regulatory Index.

5. IMF. 2017. Financial Access Survey, Mobile Money Note.

6. Mattern, M. 2018. How Ghana Became One of Africa’s Top

Mobile Money Markets. Consultative Group to Assist the
Poor (CGAP).

7. Monks, K. 2017. M-Pesa: Kenya’s mobile money success

story turns 10. CNN.

8. Jack, W. and Suri, T. 2011. Mobile Money: The Economics

of M-PESA. Working Paper 16721. National Bureau of
Economic Research.

9. USAID. 2017. The Mobile Solutions Technical Assistance

and Research Factsheet.

This note was prepared under the supervision of Kazuko Shirono

by Esha Chhabra and Bidisha Das of the Financial Institutions
Division of the IMF’s Statistics Department.
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data.IMF.org/FAS