Africa’s biggest mobile money markets

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A new Gallup study funded by the Bill & Melinda Gates Foundation has found that two-thirds of Kenyans who had sent money to family members or friends living in a different city or area in Kenya did so via a mobile phone, making them the most likely to transfer money this way across several sub-Saharan countries.

Uganda and Tanzania were second and third most likely (43% and 32% of remittance senders, respectively) to report that they had made a mobile phone-based transaction in the 30 days prior to the survey.

The study of 11 sub-Saharan African countries, "Payments and Money Transfer Behavior of Sub-Saharan Africans," took an in-depth look at sub-Saharan Africans' payment behaviors regarding domestic and international remittances, government and wage payments, utilities, and other bills.

In seven other sub-Saharan African countries surveyed, fewer than one in 20 senders of domestic remittances used mobile money transfer services. In Congo (Kinshasa) and Sierra Leone, for example, mobile phones were never used to make that kind of transaction. Respondents there sent cash or brought it in person. With the exception of Kenya, at least half of remittance senders in all countries surveyed used only these informal payment channels.

In more developed banking markets such as South Africa, Nigeria, and Botswana, bank transfers were a relatively popular way to send remittances domestically, with 33%, 29%, and 22% of senders, respectively, using this channel; however, rates of cash transactions were still high in these three countries.

Across the 11 sub-Saharan African countries surveyed, adults from rural areas and villages who sent domestic remittances were more likely to have sent this money via mobile phone transfer (28%) than those living in urban areas (13%). Urban residents were more likely to have used bank transfers (25%) than were rural residents (9%). A majority among both villagers and city dwellers still only sent domestic remittances in cash, either through someone else or in person.

The report also found that contrary to what is often believed, money in African countries is not necessarily mostly flowing from the cities to the rural areas or villages.

In fact, large city dwellers were only slightly more likely to have received domestic remittances than inhabitants of rural areas or villages. Another interesting finding is that large city dwellers were as likely to have received money exclusively in cash or in person as inhabitants of rural areas or villages. The report says this study seems to suggest that domestic remittances also often flow from city to city, instead of being mostly channeled from the large urban centers to rural areas.

Another interesting finding is that the typical story of men being senders and women being recipients of domestic remittances does not accurately reflect reality. In fact, the data reveals that the differences in sending as well as in receiving domestic remittances between both genders are minuscule. Thirty percent of women reported having received domestic remittances, compared to 28% of men. Men were only slightly more likely than women to having sent or brought money to family members or friends in the 30 days prior to the interview (21% vs. 18%).