Executive Summary

Over the last decade, mobile phone use in Africa has increased dramatically, radically altering how people on the continent access and interact with financial services. Populations that previously had no access to financial services now use payments services and a growing range of financial services delivered via their mobile phones. Nowhere is the possibility and impact of mobile financial services (MFS) more apparent than in Kenya, where the M-Pesa product has fundamentally altered Kenyans’ financial habits and shifted how development professionals and central bankers approach financial inclusion. Despite the demonstrated potential for increased financial inclusion for the region’s poor, these services have yet to gain traction elsewhere in Africa.

On May 16 and 17, 2011, the Africa Growth Initiative (AGI) at the Brookings Institution, the Alliance for Financial Inclusion (AFI), and the Central Bank of Kenya (CBK) hosted a conference and a series of private workshops on MFS. Focusing on lessons that have been learned about implementing MFS, the conference brought together a mix of development professionals, MFS experts, central bankers, and academics.

In initial private meetings to launch the two day event, panelists voiced their interest and aspiration for MFS in Africa. Michael Joseph, Fellow at the World Bank and former CEO of Safaricom, set a high bar and observed that the Kenyan experience is not unique and that the successes in Kenya could and must be replicated elsewhere through faith and courage in innovation, from both the private sector and the regulator. If they are not, “we will have failed the people of our countries.” Regulators from the central banks of Uganda, Zambia, Ghana, and Malawi pointed out their diverse challenges: slow uptake and growth despite e-money regulation and high mobile phone penetration, linking existing payments models to a safe environment for financial intermediation, and coordinating the regulation of MFS for banks and telcoms in a harmonized way.

Prof. Mwangi Kimenyi, director of the Africa Growth Initiative at Brookings, noted the goal for the participants was to develop ideas that could push the financial inclusion agenda for the unbanked in developing countries. Governor Ndung’u acknowledged the role of Central Banks as being agents of financial sector development and ensuring that financial inclusion is expanded in Africa given the low levels of access to affordable and sustainable financial services. Taking these together, Alfred Hannig, Executive Director of AFI, challenged the assembled group to identify policy initiatives that could have a ground level impact on financial inclusion. The conference met these goals, fostering not only innovative discussion, but also concrete steps for donors and government officials to advance the implementation of MFS systems worldwide and advance the goal of financial inclusion.