While mobile money is battling to take off in South Africa resulting in the recent closure of MTN SA’s mobile money offering and Vodacom’s M-Pesa SA service it is transforming the lives of Africans across the continent. Cynthia Gordon, the Executive Vice President, CEO of the African Division of Millicom Group reveals more…

Livestock trading is the second highest generator of GDP in Chad. Until only recently though, cattle traders making up this thriving industry were plagued by the lack of access to water. Previous facilities left by NGOs were unmaintained by the community and in very poor condition. This led to the question of how to get large and often distant communities with a common goal to self-organise, fund and maintain shared utilities and projects. By creating a group wallet for the National Federation of Livestock Traders to fund and maintain the water pipes, Tigo Paare created a solution that transformed an entire industry. This is just one example that shows the profound impact that Mobile Financial Services (MFS) is having on Africa’s economic development.

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As world leaders gather this week at the 71st Session of the UN General Assembly to discuss how to achieve sustainable economic development in Africa and other emerging markets, much can be said about the contribution MFS is already making. Over the last few years, MFS has driven financial inclusion in Africa and connected millions to safe, easy and secure access to finance.

We have seen this in the agricultural sector, where the benefits brought about by MFS cannot be overstated. Before these solutions launched in Rwanda, farmers would have to travel far and at times queue overnight to receive payments for their produce. In response to this, Millicom launched the ‘Tigo payment solution for agriculture’ that has already increased the financial and digital inclusion of over 11,000 tea farmers in two tea plantations located in the Mulindin and Rusizi districts. This provides a medium for farmers to access their money in a much more seamless and safe way. Tigo Cash was also recently adopted by Acess to Finance Rwanda, a non-profit organisation that works to increase access to finance. Since launching at the end of last year, there has been a seven fold increase in money withdrawal from individual Tigo Cash users.

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Female entrepreneurs across Africa face similar challenges. Accessing banking services in some African countries can be a major challenge for them and this is especially true in rural areas. Women can face several obstacles as they sometimes need permission from a male family member to open a bank account, often suffer from discrimination in the allocation of loans, and are on average less educated on handling finances. These challenges relegate them to the informal sector and expose them to risks of borrowing from unaccredited entities, potentially preventing them from efficiently saving and investing. In response to these challenges, innovative services like Tigo Paare have enabled sales women in Chad to form a community bank where they can safely save their money and contribute to fund other members’ projects.


Perhaps all of these benefits help to explain why driving financial and digital inclusion has become a key priority for governments and regulators in the region. The Ghanaian government recently enlisted Tigo Cash to support it in delivering a rural sanitation project. In addition to this, the government in Ghana also adopted the use of Tigo Cash to help distribute funds to rice farmers. This has made a significant contribution to the livelihoods of these farmers, who were previously dependent on cash transfers and worried about their safety and the timeliness of getting paid. In total, around 350,000 was transferred to over 1,800 smallholder rice farmers.

With even more support and partnership from the government, there will undoubtedly be a growth in fintech-friendly policies to promote and incentivise the use of e-money and grow the digital ecosystem in Africa further. But some economies have already come a long way. In Tanzania, which has now overtaken Kenya as the leading country for mobile money in East Africa, more than 50 per cent of our customer base use MFS.

Over the coming years we can expect mobile money, electronic payments and new banking technologies to continue their significant contribution to sustainable economic development in Africa. In addition to this, we can expect full interoperability between services and countries. Accessibility is key for the consumer and for this the mobile ecosystem has to consolidate much like the credit card system did many years ago. As MFS evolves and more people are educated on how to use these services, African economies will benefit from more businesses and entrepreneurs entering the formal financial system. And we will be there to lead innovation through cutting-edge products and partnerships.