By Amina Faki
The Governor of Central Bank of Kenya, Dr. Njoroge Patrick, has said that Kenya has leveraged mobile phone technology and made remarkable strides in financial inclusion.
A decade ago, Kenya was characterized by high poverty incidences and high levels of financial exclusion. With the adoption of mobile financial services and agency banking, among other innovations, financial access has increased from 26.7 percent in 2006 to 75.3 percent in 2016.
Lack of infrastructure is a key challenge in most parts of Africa and distribution is often the missing link between innovation and impact. Even with ubiquitous agent networks such as Kenya and Tanzania, distribution has remained a principle challenge in the development of mobile money; agent liquidity, interoperability, fraud and network downtime, trust, slow account opening procedures etc.
Globally, even where there are digital platforms in place the industry still has challenges that go beyond transactional services and offering additional products such as savings, credit, insurance, health, agricultural finance
Maintaining and growing networks of ubiquitous, liquid and well-trained agents are the formidable challenge. Kenya still has a small proportion of transactions that are made through digital means. Cash is still king: customer trust, platform integration, and interoperability issues stand in the way of replacing paper with virtual currency.
Despite high mobile money user penetration in the country, e-money is still only used for a small minority of payment. For proximity payment, cash continues to dominate.
Most product innovations in the mobile financial services in Africa have come from markets that have already reached scales such as Kenya and Tanzania. Mobile money deployments in these countries share several characteristics: a widespread agent network that rewards well-performing agents and a mobile wallet proposition that emphasizes customer care and customer education. New products offered today in Kenya and Tanzania includes on-demand loans, pay-as-you-go models for utility service consumption, and mobile microinsurance.
Central Bank of Kenya governor Njoroge said that the current innovations have mainly addressed the issue of the convenience of financial products and services to the general public. As a regulator in the financial sector, our focus now is to enhance the usage of the existing financial innovations as well as assessing the quality of the products and services offered to the consumers. This will ensure that other barriers to access such as affordability, and significance of the products and services are addressed.