Understanding Sub-Saharan Africa’s Mobile Financial Services ecosystem - analysis in a new report to be released August 2015

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Like Topsy, Africa’s m-money sector has just grown and grown with success in some markets and only slow growth in others. But the sector has spawned a whole undergrowth of suppliers and service integrators; you can do everything from sending remittances to paying for insurance. Confused? You won’t be after you read our latest report on Mobile Financial Services.

In Sub-Saharan Africa’s, Mobile Financial Services have been growing rapidly to become one of the key investment opportunities within the financial services and ICT markets. In many countries, there are now more mobile accounts than bank accounts.

New players have sprung up in various market segments and there is growing international interest from various types of investors. Tracking this growth is far from easy but &innovation, a South African consultancy - in partnership with Balancing Act - has taken 9 months for 2 analysts to produce what is almost certainly the most detailed report on the Mobile Financial Services market available. The data were collected from the end of 2014 up until July 2015 and so is as up-to-date as you can get.

Sylvain Béletre interviewed the report’s authors about what’s in this report.

«This analysis probably offers the single most detailed and up-to-date data source for the Sub-Saharan Africa’s Mobile Financial Services sector. Decision markers - banks, operators, governments, analysts, investors, internet entrepreneurs, etc. - looking to understand and expand in this field, prepare a business plan and convince partners will find valuable insights in this report. It will save research time, cut costs and is essential reading for anyone involved» explains Nevo Hadas, CEO of &Innovation.

«Africa’s growth projection of GDP and population offers long term potential for Mobile Financial Services. In Kenya alone, there are more Mpesa agents than ATM per capita in the US, and Mobile Financial Services cost less to operate than traditional bank services. We are seeing multiple basic payment services, but credit, insurance, or health covers’ services are still under-represented. The opportunities for banks and insurance services are still massive as there is still very limited infrastructure in place. This is what is called the unbanked opportunity» adds Hadas.

«We’ve read most of the what is available on the web and interviewed many key executives, and have identified results so far, identifying innovations and best practices that have worked. Our research describes almost 200 players in this market segment. The good news is that those players are predominantly African companies, about 80%, while the rest are from Europe. The rapid growth has already led to a few acquisitions with the latest being Commonwealth Bank buying TYME bank, a leading mobile only banking provider, to emulate its model in South East Asia.

Among our conclusions, we believe that the 340 millions unbanked across Africa will grow dramatically with population trends. As basic services like mobile money are inherently based on a network effect, value will skyrocket» highlights the report’s co-author, Jordan Gilham-Law, consultant at &Innovation, adding that «in 2014, around USD 650 million net revenues were generated by Mobile Financial Services companies in Africa. The total global transaction volume sums up to USD 6.2 bn. Experts believe that revenues will amount to between USD 1.3 and 1.5 bn in SSA by 2019.»

The 90-page report is split into three sections: a sector’s description (the market, Mobile device penetration, key players : Operators, Banks, Devices and Aggregators ; services pictured on a Lumascape); Industry trends and the evolution of adoption; A directory of Companies and Services in the Mobile Financial Services Ecosystem. It is illustrated with charts, tables, and maps.

Africa is a huge and compelling market for potential investors, three times the size of China, home to six out of the world's 10 fastest-growing economies, and to over a billion people, more than half of who have a mobile phone and 40% of who are living in urban areas. A large part of its young population is incredibly adept at figuring out new technologies and eager to use it.

The report, priced at GBP 500, can be purchased online and is delivered to clients with a 15 minutes phone brief. It is part of standard market intelligence for banks, telecoms professionals and entrepreneurs getting into this sector. It will be released in August 2015. Custom research looking at deeper research and analysis can also be commissioned.

To order the report, send an email to Sylvain Béletre, at Balancing Act

785 - Mobile Financial Services EcoSystem in Sub Saharan Africa 

Innovation in Africa is a fortnightly e-letter that covers: start-ups and investment; energy; ICT4D; 3D printing; and innovation in Africa and its cities. We have already produced 32 issues and these can be viewed here:

Essential reading for those interested in new start-ups and innovation that will change Africa. If you would like to subscribe, just send an email to info@balancingact-africa.com with Innovation in Africa in the title line.
Some examples of past issues below:

Savannah Fund’s Mbwana Alliy on the barriers to start-up success, his favorite start-ups in e-commerce and bit coin and the Safaricom mistake

3D Printing in Africa – A Slow Burn Movement with huge potential that has yet to find its growth path

Separating Hype from Reality in the Fizzy World of Africa Start-Ups – VC4Africa survey findings

Education entrepreneur Obinna Ukwuani, Exposure Robotics’ plans to launch the first African STEM secondary school in Nigeria

Videos interviews to watch:

Andrew Rudge, Reach Trust on expanding the mobile reach of its African ed & health service

Joel Macharia on his start-up Abacus that will allow Kenyans to trade shares online

Albert Mucunguzi, PC Tech on the Ugandan start-up scene and its future prospects

Andrew Rudge, Reach Trust on expanding the mobile reach of its African ed & health service

Ryan Yoder, ActivSpaces on the challenges faced by start-ups in Cameroon

Will Tindall on Emerging Crowd, an online platform for emerging market companies to raise equity

Sacha Poingnonnec, Africa Internet Group on the challenges of running an online business in Africa

Felix Kimaru, Totohealth on empowering mothers with health information via SMS on their mobile

Fernando de Sousa, Microsoft on what the business model is for TV White Spaces in Africa

Dominic Vergine, ARM on Literacy Bridge's talking book with advice for farmers in Northern Ghana

Candace Nkoth Bisseck on how Kaymu is connecting buyers and sellers online in Cameroon

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