These Sub Saharan African countries grew most bank penetration in 10yrs

Senegal, Gabon, Uganda, Ghana and Togo are among the top five countries in the Sub-Saharan Africa (SSA) region that recorded the most growth in bank penetration within a period of 10 years, a BusinessDay analysis shows.

According to data from the recently released 2021 Global Findex report by World Bank shows, the percentage of adult banked population or account ownership for Senegal increased by 50.1 percentage points to 56 percent in 2021 from 5.8 percent in 2011 followed by Gabon whose account ownership rose by 47.1 percentage points to 66.1 percent in 2021 from 19 percent in 2011.

Uganda’s bank population increased by 45.5 percentage points (65.9 percent), Ghana increased by 38.8 percentage points (68.2 percent) and Togo with 38.7 percentage points (49.6 percent).

Nigeria’s account ownership or banked population increased by 15.6 percentage points to 45.3 percent in 2021.

The report titled ‘Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19’ attributed the increase largely due to the adoption of mobile money.

“Mobile money is driving growth in account ownership, particularly in SSA, where 33 percent of adults have a mobile money account,” David Malpass, President, World Bank Group stated in the report.

Malpass also added that in SSA, 39 percent of mobile money account holders now use them to save.

“And more than one-third of adults in developing economies who paid a utility bill from an account did so for the first time after the start of the COVID-19 pandemic evidence of its impact on digital adoption.

“It is critical to build on these encouraging trends, especially given the current headwinds. High inflation, slow economic growth and food scarcity will affect the poor the most.

“Expanding their access to finance, reducing the cost of digital transactions, and channeling wage payments and social transfers through accounts will be critically important to mitigate the reversals in development from the ongoing turbulence,” Malpass advised.

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The Global Findex report has become a mainstay of global efforts to promote financial inclusion. Launched with funding from the Bill & Melinda Gates Foundation, the report has been published every three years since 2011.

The 2021 edition is based on nationally representative surveys of about 125,000 adults in 123 economies during the COVID-19 pandemic.

It contains updated indicators on access to and use of formal and informal financial services, including on the use of cards, mobile phones, and the internet to make and receive digital payments including the adoption of digital merchant and utility payments during the pandemic and also offers insights into the behaviors that enable financial resilience.

Earlier in the year, a report on mobile money by the Global System for Mobile Communication Association (GSMA) noted that the number of active mobile money accounts (30-day) in the SSA region reached record high in 2021.

According to GSMA, SSA active mobile accounts increased year-on-year by 15.1percent to 183 million, highest in 10 years.

“A decade of growth in active accounts and transaction values has shown that mobile money is playing an increasingly important role in the daily lives of people in Lower Middle-Income Countries. It is also diversifying its value proposition,” the report stated.

Similarly, Mats Granryd, the director general at GSMA said the pandemic has made mobile money even more critical, and the data shows this.

“As people increasingly paid for everyday goods and services through their mobile money accounts, merchant payments skyrocketed.”

The World Bank report also highlighted that despite these areas of progress, there continue to be gaps in financial access for typically underserved adults.

“Lack of money, distance to the nearest financial institution, and insufficient documentation are consistently cited by unbanked adults as some of the primary reasons they do not have an account,” the report stated

“Lack of a mobile phone is a common reason cited in SSA by 35 percent of unbanked adults for not having a mobile money account.”

The report recommended that global efforts for inclusive access to digital identification and mobile phones could be used to increase the account ownership of hard-to-reach populations.