Financial inclusion pace to grow

UNIMONI head of Africa Allen Semboze (left) and Finablr Group executive director and Unimoni chief executive officer Promoth Manghat, Executive Director of Finablr during the rebranding ceremony from UEA Exchange to Unimoni in Nairobi. PICTURE COURTESY OF APO GROUP

THE anticipated increase in the demand for payment transaction and lending services are attracting investment from mobile operators, banks and international funds that are positioning themselves to do more in the sector.
To this effect, demand for services are tipped to witness a large uptake with financial transactions made via the internet and mobile phone expected to grow from the current US$200 million to US$3 billion by 2020 in Africa.
The situation is similar in Zambia, with the adoption of Digital Finance Services (DFS) growing from two percent in 2014 to 24 percent in 2017 of adults’ active subscribers with a possibility of further growth.
With the projected growth in financial inclusion in the country, it is expected to contribute to overall economic growth and help in the attainment of Sustainable Development Goals (SDGs) by 2030.
Financial inclusion means that individuals and businesses have access to useful, affordable financial products and services that meet their needs, transactions, payments, savings, credit and insurance delivered in a responsible and sustainable way.
This is the reason; Government has signed the United Nations 2030 Agenda and has also expressed its commitment to achieving the SDGs in its aspiration to make Zambia a middle-income country.
In this regard, Bank of Zambia (BoZ) has called on stakeholders in the financial sector to provide detailed data in assisting government devise policies and strategies to promote financial inclusion.
BoZ director of banking currency and payment systems Lazarus Kamanga believes that collecting the right information is important in order to make informed decisions on how to drive the financial inclusion agenda.
Mr Kamanga notes that currently, over 13 million Zambians have mobile phones out of which only about 2.5 million are active as well as accessing financial services.
“BoZ supports the issue of financial inclusion and given the fact that technology is available, DFS is the way to go.
“As the central bank, we see there is potential to increase financial inclusion in Zambia if the remaining 11 million can actively use their mobile phones,” he adds at the launch of the state of the Zambian digital financial services industry, 2017 report by United Nations Capital Development Fund Mobile Money for the Poor (UNCDF MM4P) last week.
Since the launch of the UNCDF MM4P programme in Zambia in 2014, there has been an upward trend in the growth of the digital financial services industry in Zambia.
Giving views on the Zambian landscape, UNCDF digital financial services consultant for MM4P Zerubabel Kwebiiha believes that the report will update industry regulators, providers and observers on the country adoption of this technology.
Mr Kwebiiha observes that the information in the report can be leveraged for more effective and informed decision-making regarding the growth and direction of digital financial services in Zambia.
“However, even with this growth, there is still a significant opportunity for providers to improve access and usage of DFS among new and existing customers, including previously-excluded segments of the population such as women, youth and refugees in rural areas,” he says.
And a leading global provider of money transfer, foreign exchange, payments and credit solutions, Unimoni notes that Zambia being one of the growing economies in Africa has tremendous potential to attract more 15investors in various sectors of the economy.
Unimoni, which is formerly, UAE Exchange and a subsidiary of Finablr Group of United Arab of Emirates, acknowledges Zambia’s central location in the sub- Sahara Africa.
The company believes that its position makes it more attractive for investors to invest in sectors such as financial industry.
Currently, the company, which has presence in Zambia, Botswana, Kenya, Rwanda, Seychelles and Uganda will soon open a branch in Tanzania.
Finablr Group executive director and chief executive officer Promoth Manghat notes that the anticipated increase in Zambia’s population as well as Africa, presents an opportunities for financial providers to invest more and reach out to the unbanked population, especially those in rural areas.
“There are several opportunities available across Africa, which holds fast growing economies, including Zambia, so we are going to take advantage of the prospects,” Mr Manghat said.
He also explains that the company will focus on providing technology, which is user friendly and create partnerships with both large and small institution in countries where it has presence.
Mr Manghat, however, notes that the increased use of DFS comes with challenges of security of customers’ money through cybercrime, any criminal activity that involves a computer, networked device or a network.
“Digital financial mobile providers need to plan and implement measures that will address the issues of cybercrime for users to have confidence in the service and adopt it,” he says.
And emphasising the need for innovation in the sector, Unimoni regional head for Africa Allen Semboze feels that the DFS landscape in Zambia and Africa as whole has changed as a result of adoption of various technologies. Therefore, there is urgent need for financial providers to adopt appropriate strategies to meet people’s needs.
“We are also working on developing our digital capabilities, including an online remittance platform, a white label solution for our corporate customers and an online foreign solution.
“While we are adopting a phased approach towards our growth in Africa, all these offerings will be lived by 2020 across our African market,” he said.
In view of the opportunities that lie in the sector, DFS providers should develop and communicate clear propositions for users to appreciate and adopted the service.
Indeed, DFS need to focus more on developing their internal data analysis and management capacity to support segmentation of customers and agents as well as monitor usage trends which can lead to key insights for the expansion of services.

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