Gabon to benefit from new mobile methods of payment
The success of mobile banking in Kenya has prompted similar initiatives to spread throughout the continent, although results elsewhere have been more mixed. Telecoms operators in Gabon, who face an increasingly revenue-competitive environment, are hoping to use mobile money programmes to improve their bottom lines and have signed a host of new deals to extend the range of products on offer.
Kenya-based Safaricom’s success with its mobile banking M-Pesa programme has sparked a flurry of similar programmes in sub-Saharan Africa, where high mobile penetration combined with low rates of financial intermediation make the potential for growth in mobile money services extremely high. The large proportion of mobile users who operate in the informal market or in underbanked rural areas make the programmes particularly appealing, as they allow customers to complete a variety of financial transactions via mobile phone, often without a formal bank account. Customers can deposit and withdraw cash, send and receive money transfers, and pay for goods and services through mobile accounts.
As a result, mobile banking programmes have been launched in a variety of markets, including Tanzania, South Africa, Ghana, Nigeria and Senegal. Adoption in many of these markets has been modest at best – in Nigeria, for example, where there are 110m SIM cards in circulation, only 5m users have signed up for mobile money programmes and the volume of transactions was fewer than 7m. However, telecoms operators estimate that the total volume of mobile financial transfers in Africa could exceed $200bn per year by 2015.
As a result, operators are looking to increase mobile banking services and Gabon is no exception. While the number of bank branches per 100,000 adults increased from 4.34 in 2009 to 5.77 in 2011 and the number of ATMs per 100,000 adults rose from 8.04 to 11.12 over the same period, these facilities are still largely concentrated in the major urban centres of Libreville, Port-Gentil and Franceville, making mobile banking a more attractive option for rural populations. Mobile money programmes will be particularly useful for urban workers with families in the country’s interior, providing an option to save and transfer money efficiently.
Operators estimate that the gross number of mobile customers reached 2.52m in 2012, well beyond the population estimate of 1.5m. This figure is inflated by the widespread practice of owning multiple SIM cards to take advantage of coverage disparities and special promotions on different networks; even so, the telecoms regulatory agency, the Autorité de Régulation des Communications Électroniques et des Postes, estimates that the real penetration rate is close to 97%.
By comparison, estimates of the percentage of the population with a bank account range from 6% to 15%, quite low considering Gabon’s position as an upper-middle-income country. This creates considerable potential for the take-up of mobile financial services, and telecoms operators and financial institutions have moved quickly to fill this market gap in the past year.
Airtel Gabon, a subsidiary of the India-based Bharti Airtel and Gabon’s largest telco, was the first to introduce mobile money services in March 2012 in partnership with BGFIBank. Airtel Money subscriber numbers grew quickly, picking up a reported 80,000 customers between March and August that year. The programme allows subscribers to transfer money, purchase airtime for mobile phones and pay utility bills. In addition, participating companies can opt to pay employees’ salaries electronically.
The programme was launched with 900 points of service, where customers can make cash deposits and withdrawals, and around 100 operational points of payment – businesses that accept mobile payment for goods and services. These include petrol stations, pharmacies and grocery stores.
Airtel signed a second bank partnership with Ecobank in July. The agreement will allow Ecobank clients to consult bank account balances and recent transaction histories, as well as transfer funds from Ecobank accounts to Airtel money accounts via phone.
Meanwhile, Gabon Telecom, the second-largest telecoms provider, announced in March 2013 that it will partner with India’s Mahindra Comviva to launch its own service. The programme, “Mobi Cash,” coupled with “mobiquity” mobile financial applications, was created in 2010 by Gabon Telecom’s parent company, Maroc Telecom, and has already been deployed in other subsidiaries in Burkina Faso, Mauritania and Mali. No timeline has been announced yet for the programme’s launch. Other operators, including Moov, have mobile banking projects under development but have not formally announced any product.
For telcos, mobile money operations stand to open up new revenue streams. Fierce competition between Gabon’s four mobile telephony providers has pushed voice and message prices down, with the monthly average revenue per user declining by 30% between 2007 and 2011. As the client base nears saturation, future growth in the sector will likely come from the introduction of innovative services, including mobile money.