AFI members key participants at mobile financial services conference

The Brookings Institution’s Africa Growth Initiative co-hosted a conference with AFI and Central Bank of Kenya (CBK) on 16-17 May. Held in Washington D.C., the conference used the theme “Expanding Financial Inclusion in Developing Regions: Economic Growth through Innovations in Mobile Technology.” Focusing on the potential for increased access to mobile financial services in Africa, existing successes, and the role regulators can play in enabling access, the conference worked to move the use of this technology forward.

Great potential and opportunities exist for mobile financial services in Africa due to the high penetration of mobile phones but the low penetration of formal banking. Even though countries are at various stages in implementing this service, policymakers are committed to enabling its use. Policymakers now recognize the benefits of including a mobile money system into the financial infrastructure. Building on this system, other products and services such as savings, credit, and financial intermediation can be implemented.

The first day introduced current issues in mobile financial services to a wide audience through public discussions by key experts covering risks and regulation, scaling up services, monetary policymaking, and the new frontier. The second day saw private small group discussions where participants currently playing different roles in mobile financial services in Africa held in depth deliberations to solidify action points.

The most prominent example of using mobile money successfully cited at the conference was Kenya’s case of M-Pesa. This initiative shows that increasing access to the formal financial system through mobile services can be done, and the regulator enabling and working with the private sector can be a driving force. However, policymakers at the conference understood that while M-Pesa offers extremely valuable lessons, countries may follow different trajectories and enable different service models for success in their respective markets.

Policymakers took ownership of their critical role in making mobile money work for the unbanked. As the Governor of the CBK, Njuguna Ndung’u said, “We are a regulator and an agent of development.” However, the private sector must perceive a business case and rise to the occasion. It was understood that development of mobile financial services can be accomplished by enabling regulation, channeling government payments, partnerships with the private sector, increased financial literacy, and sharing knowledge. Participants further learned that these are not easy tasks for government regulators and private industry alike making country level dialogue between the two essential.

The conference was an opportunity for a number of AFI members to showcase their work on mobile financial services in Africa. Member discussants included:

• Perks Ligoya, Governor of the Reserve Bank of Malawi
• Njuguna Ndung’u, Governor of the CBK and AFI Steering Committee
• Chair Louis Kasekende, Deputy Governor of the Bank of Uganda

Other key experts included people such as Maria Otero, Under Secretary of State for Democracy and Global Affairs of the United States Department of State. The program was opened by Strobe Talbott, President of the Brookings Institution.

The conference allowed AFI members to explain the opportunities and challenges in Africa and suggest ways to harness the AFI network to move their agenda forward. Currently working to expand mobile financial services in Africa and around the world, AFI’s Mobile Financial Services Working Group (MFSWG) will provide one platform to take this discussion further.