Africa’s youth are adopting mobile money at an exponential rate, primarily to pay for digital entertainment services such as gambling, internet streaming and paid TV.
Kenya is already dominated by one firm, which today boasts around 15 million registered users, and facilitates about 40 percent of the economy’s payments. Western Union recently struck a deal with MTN to bring mobile money products to Uganda, where transactions are already growing by 48 percent. While a series of high profile deals in Ghana has seen mobile money accounts rise six fold in five years. Nigeria is soon to follow. More money was invested in Nigerian fintech in November than for the entire continent last year.
McKinsey estimates that more than half of the continent’s billion inhabitants will have access to banking services by 2022. In a recent report from Geopoll, it’s the youth across these sub-Saharan jurisdictions who are driving growth in demand for mobile money services.
Across Kenya, Ghana, Nigeria, Uganda, Tanzania and Cote D’Ivoire, mobile money had a 28 percent use rate for under 35’s – and was perhaps unsurprisingly used almost exclusively for the purchase of digital goods that would be otherwise difficult to obtain without banking services.
Across the six countries mobile money was the most popular payment method for the following categories: gambling (63 percent average), home Internet (54 percent), airtime (53 percent), and paid television services (53 percent).
While gambling was most commonly paid for using mobile money, it made up a relatively low percentage of youth monthly expenditure, averaging at 1.1 percent (a global norm for mature markets) – potential for misreporting aside.