In 2012, Africa’s mobile financial transactions reached USD 61 billion – greater than the amount of money sent via mobile in Europe and North America combined. Africa’s consumer adoption of m-payments has been so prolific that it has led to Africa’s unbanked being renamed Africa’s financially included.
T
he m-payments explosion, which began with bill payments and money transfers, has now spread to Africa’s business world. African small business also want access to financial services, but have so far been denied because they were either not eligible for a bank account or for a credit card.
A report by Omidya Network, Accelerating entrepreneurship in Africa, states that 84% of SMEs in Africa are either un-served or underserved, representing a value gap in credit financing of USD 140–170 billion.
Another report by the African Development Bank, Financial Inclusion and Integration through Mobile Payments and Transfer, found 84% of investments of SMEs in Africa are financed through internal funds compared with 70% in other developing economies. The share of bank financing in Africa is 8% (compared to an average of 11% in other developing countries) while the share of equity financing in Africa is less than 2%, as compared to about 8% in other developing economies.
As mobile was key to the consumer revolution, mobile will be key to unlocking financial services to small business and farmers. Access to credit, or m-funding, will increasingly become a routine exchange between alternative financiers and business in Africa.
Source: https://www.linkedin.com/pulse/m-funding-reach-africas-small-businesses-anthony-coundouris
