MWC, Africa, Kigali – 27 October 2022 - New research from Vodafone Group, Vodacom Group, Safaricom and the United Nations Development Programme (UNDP) indicates that the successful deployment and adoption of mobile financial services can have a direct, positive impact on GDP growth in developing markets.
The econometric modelling research1 – which examined 49 countries in Africa, Asia and Latin America – found that countries with successful mobile money services had an annual GDP per capita growth rate up to 1 percentage point higher than countries where mobile money platforms had not been successful or not introduced.
Based on previous World Bank research on the relationship between economic growth and reductions in the number of people living in poverty2, this GDP per capita growth implies that countries with successful mobile money adoption could reduce poverty by around 2.6%.
The analysis was conducted as part of the companies’ Africa.Connected campaign, an initiative to drive sustainable development through collaboration and help close the divides that prevent progress in Africa’s key economic sectors. The findings are part of a new research paper, Digital Financial Platforms to Empower All, the fourth research paper developed and released under the Africa.Connected umbrella.
Sitoyo Lopokoiyit, CEO of M-Pesa Africa and Chief Financial Services Officer at Safaricom, said:
“Mobile financial services platforms like M-Pesa are vital drivers of financial inclusion in society which can improve individual life chances and enable enterprises to launch and expand, bringing wealth and jobs into developing economies. There remains though barriers both to accessing platforms – including digital literacy and smartphone accessibility – and to developing them – with an un-level regulatory playing field for non-traditional financial services providers in many countries.”
As part of the Africa.Connected research, consumer and business surveys were conducted focusing on users of M-Pesa in Kenya and Tanzania, and results were extrapolated to Ghana and Mozambique. A business survey was also conducted in Kenya. The resulting research underpinned the continuing importance of the world’s first mobile money service 15 years after it launched in 2007. The researchers estimated that:
- 17.6 million current users in the four countries did not have access to any formal financial services before using M-Pesa;
- 98% of businesses surveyed said that M-Pesa helps them to do businesses, with the main benefits of M-Pesa being its facilitation of faster and safer payments and enabling the sale of goods and services online; and
- 95% of businesses surveyed indicated that they use M-Pesa for at least half of their business transactions.
Ulrika Modeer, UN Assistant Secretary-General and Director of the Bureau of External Relations and Advocacy at UNDP, said:
“Financial inclusion is both a pre-condition and a key enabler for meeting many of the UN’s Sustainable Development Goals, including reducing poverty, boosting economic growth, promoting market access and championing investment in key sectors like education, agriculture, and healthcare. But more importantly, it is about putting people at the center, empowering them with more agency over their money and increasing their resilience. Eliminating financial exclusion in Africa, and across the globe, must be a priority if we are to deliver on inclusive, sustainable prosperity for all on a healthy planet.”
Notes to Editors
1.The econometric model made use of data covering the period 2003 - 2019. More recent data was not included in the modelling due to the effects of the pandemic.
2. Adams, 2003, Economic Growth, Inequality, and Poverty: Findings from a New Data Set. World Bank. Available online: https://elibrary.worldbank.org/doi/abs/10.1596/1813-9450-2972
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Vodafone Group, Media Relations
Unique in its scale as the largest pan-European and African technology communications company, Vodafone transforms the way we live and work through its innovation, technology, connectivity, platforms, products and services.
Vodafone operates mobile and fixed networks in 21 countries, and partners with mobile networks in 47 more. As of 30 June 2022, we had over 300m mobile customers, more than 28m fixed broadband customers and 22m TV customers. Vodafone is a world leader in the Internet of Things (IoT), connecting around 160m devices and platforms.
We have revolutionised fintech in Africa through M-Pesa, which celebrates its 15th anniversary in 2022. It is the region’s largest fintech platform, providing access to financial services for more than 50m people in a secure, affordable and convenient way.
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