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Rules favouring banks said to curb mobile money growth in Africa

Olusegun Abolaji Ogundeji | July 20, 2015
Africa has a reputation for being on the vanguard of mobile money services, but regulations forcing mobile operators to partner with financial institutions are strangling further growth in the sector, say industry players and market analysts.

Those in favor of easing regulations on mobile operator financial services point to Kenya-based Safaricom. The company, which launched the groundbreaking M-Pesa service, is the most successful mobile money operator in Africa. The mobile-phone based money-transfer service is led by the telecom company, in partnership with local banks.

"Safaricom is an exception because when it launched, the authorities did not notice it much, thinking it was just another VAS (value-added service) and not knowing what to expect," Mbongue said. "The success of M-Pesa lies partly on Safaricom's dominant market share, strong distribution channel countrywide and strong involvement in the marketing and distribution process."

 

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