Mobile banking has "great potential" to improve financial inclusion in Senegal
Mobile banking is an effective way to enhance financial inclusion and develop microfinance in Senegal, said a panel of experts during the annual Days of microfinance held this week in Dakar.Mobile banking is an effective way to enhance financial inclusion and develop microfinance in Senegal, said a panel of experts during the annual Days of microfinance held this week in Dakar.
Thierno Seck, Executive Director of the 'Mobile banking mutualisé' initiative pointed out that 80 percent of the Senegalese population has no access to the formal financial system and only eight percent owns a bank account.
He told Sud Quotidien that a study conducted by the Frankfurt School and published in 2011 reveals that less than two percent of the Senegalese population use a credit card.
He believes that modern payment systems and financial services could contribute to economic development and poverty reduction, as the cost of cash is "exorbitant" (more than 30 billion CFA francs (€ 45.7 million) per year in the WAEMU region).
"Senegal has great potential with a rate of mobile equipment reaching 77 percent. The microfinance penetration rate can be increased up to 12 to 13 percent. With an accentuation of these services, six million people could be better served, "he told Sud Quotidien.
According to the Microfinance Office most microfinance institutions are based in urban areas because of profitability reasons, making it difficult for rural populations inside the country to access these services.
The use of mobile banking services is expected to help these populations access credit and lower the costs linked with the physical presence of microfinance institutions.