The COVID-19 pandemic, which has been in news headlines all 2020, has caused several industries’ deterioration. Not just in Africa but all over the world.
Data from S&P Global Market Intelligence shows that airlines, leisure facilities, casinos & gaming, oil & gas drilling, and auto parts & equipment are five industries affected most by the pandemic.
Despite all of this, the mobile money industry in Africa remains unaffected. In fact, the industry is experiencing rapid growth amidst the pandemic. The effects of lockdown and no-contact imposed by the pandemic had contributed massively to the industry’s growth the past year.
- Before The Pandemic
Mobile money already had a massive presence in Africa before the outbreak of the coronavirus. M-Pesa, MoMo, MTN, and several other companies and telecommunication companies offer mobile money services to customers via licensed agents who can be found at several locations.
Mobile money allowed registered users to manage a virtual wallet. They can deposit money into their wallet and use the money to make several purchases and payments. Plus, they can send money to other users. Since renowned telecoms operated these mobile money services, it was easier for customers to get the hang of it.
Basically, you need to open a bank account to deposit money, transfer it to others, receive, and make other payments. However, Africa is one of the most underbanked regions globally, so residents needed these alternatives. As a result, people with less access to banking services embraced the use of mobile money more.
In 2019, the total mobile money transactions across the world were $690.1 billion. Out of this amount, Sub-Saharan African accounted for about 64%. This was from 24.46 transactions transacted by approximately 200 million mobile money users, about $456.3 billion. This shows that Africa was the continent with the most mobile money inclusion just before the pandemic.
- During The Pandemic
The world governments were forced to lockdown their countries to curb the spread of the virus. In several African countries, offices, schools, religious houses, etc., were closed.
People could no longer go out as usual to make purchases and other payments, but payments had to be made. So, mobile money became the solution of cashless transactions for more Africans without access to banking services.
Take M-Pesa, for example. The service had about 24 million customers before Kenya announced a partial lockdown in March. With the lockdown imposed, the mobile money service provider recorded about a million new users resulting in about 25 million customers.
Kuda, a Nigerian digital tech microfinance bank, had more new customers in April than they had in January, February, and March 2020. Note that lockdown restrictions in the country began in late March.
In March, the central bank working with financial banks and mobile networks reduced mobile money transaction charges for about three months for Ghanaians. The aim was to promote digital forms of payment due to the pandemic, and it did work as purchases reached a record that month.
In Togo, a relatively small country, mobile money helped in delivering COVID-19 relief to about 500,000 residents in just about two weeks. These residents were able to receive financial support to sustain them during the pandemic via their mobile phones.
- Where to trade using mobile money?
During the pandemic, some assets recorded a large increase in price, for example, cryptocurrencies. Many people are trying to take advantage of this fluctuation on the market but buying cryptos directly with mobile money is almost impossible. I was not able to find any crypto-currency exchange for accepting mobile money.
I was able to find CFD broker where I can trade cryptos as CFD using mobile money for it. I know It´s not the same as buying it directly, but I don’t see any other option. Anyway, in my point of view, I could say that trading CFDs is even better than buying and selling real cryptos.
- Do you know why?
You can use leverage to multiply your profits and losses. So you need less money to gain more/lose more. It works completely differently than direct buying, it´s like a bet on a change of exchange rate.
- So how can I start?
You can start by finding the right broker for you. I highly recommend you to see a comparison of CFD brokers and find the suitable one for you. I personally trade with IQ option and I´m very satisfied with their trading platform, but there are so many options for brokers. Be a man (or lady) and pick up yourself.
- Bottom Line
The money mobile phones became widely used in African countries didn’t take long for companies to leverage on them. One way was by introducing mobile money services and so far so good; it has been very profitable.
The success can be attributed to under banking because mobile money services have more success in countries where banking services are not easily accessed. For example, countries in Southern Africa have less mobile money inclusion in most countries as there’s easy access to banking services.
The industry, however, is still in various development phases. While mobile money is emerging in some countries like Senegal and Cote d'Ivoire, it is growing in other countries and matures in the rest.
Nevertheless, the pandemic has caused a general increase in mobile money services thanks to lockdown and movement restrictions.
Furthermore, from the statistics, Africa is at the forefront of a digital financial transformation as the continent leads the World in mobile money inclusion.