New scheme promotes mobile banking services in rural areas of Senegal
The Senegalese microfinance office has announced the introduction of a new scheme designed to improve access to finance in rural areas by encouraging mobile banking usage.The Senegalese microfinance office has announced the introduction of a new scheme designed to improve access to finance in rural areas by encouraging mobile banking usage.
During a conference on June 22nd in Dakar, it revealed that microfinance has a low penetration rate in rural areas, at around 11 percent, Sud Quotidien newspaper reports.
This rate can be explained by the fact that 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 microfinance office hopes this situation will improve thanks to this €9.1 million scheme, supported by the German Cooperation Agency.
The use of mobile banking services is expected to lower the costs linked with the physical presence of microfinance institutions.
This scheme, already tested in several towns across the country, includes financial training to help people understand and trust this technology - and eventually make savings and credit related transactions.
It is based on several services such as Wari or Orange Money, with a multi network option.
The African Management Institute (IAM) discussed this topic a few days before, 'Le Senegal Post' reports.
The IAM believes that it is "a shame to see that rural populations, which should be privileged when it comes to access to finance, are excluded from the financial system because of strict requirement from banks and financial institutions".
It called for the relaxing of the regulation so that rural areas can benefit from the economic impact of microfinance.