Mobile money a vehicle to financial inclusion in Mozambique

Mobile money a vehicle to financial inclusion in Mozambique


Access to financial services in Mozambique is still limited, exacerbated by existing low literacy levels, especially in rural areas. Twenty percent (20%) of the country’s adult population have access to banking and financial services made up of 40% of people living in urban areas and 10% of people living in rural areas (FINSCOPE Study, 2014)1.

The government of Mozambique has sought to address financial exclusion through the National Financial Inclusion Strategy (2016-2022)2, which aims to increase the accessibility of financial services to the population, especially for those living in rural areas. Mobile money services are one of the channels that has the potential to accelerate financial inclusion by providing an alternative to formal financial services, particularly for remittances.

We undertook a recent study (August 2018) focused on M-Pesa’s Pedro communication and marketing strategy, with funding from the Financial Sector Deepening, Mozambique (FSDMoç)3. We found that additional, previously financially excluded Mozambicans have gained access to financial services through mobile money (M-Pesa). The following are some of the study’s highlights:

  •   Although there is increased uptake of mobile money in Mozambique, this is happening more rapidly in urban areas than in rural areas. M-Pesa users are mainly younger, more urban, better- educated and wealthier than non-users4, hence there is still work to be done to increase financial services usage (through mobile money) in rural areas.
  •   Presently M-Pesa has by far the highest mobile money market share in Mozambique and this has been propelled by the adoption of the Pedro marketing and communications strategy, which has combined the use of a promoter model and substantial publicity.
  •   The promoter model (which was one of the innovations of the Pedro marketing and communications strategy), hired promoters whose main objective was to sign up new M-Pesa clients. There is evidence that through this model, there was a substantial increase in mobile money usage, especially in urban areas. More than 2 million new clients enrolled over the period resulting in penetration rates (in the study-sampled areas) of more than 50% in some urban areas, (in Maputo city, penetration has been as high as 70%), while in rural areas where the Pedro strategyhas been rolled out penetration rates of 30% or higher have been found.
  •   Although there has been good progress with mobile money uptake in Mozambique (especially M-Pesa) in the past two years, there have been some issues of fraud, under-developed mobile network infrastructure in rural areas, reduced purchasing power of agents (managing their e- float) and M-Pesa users that affect users capability to invest/spend.
  •   Additional services that could be of significant interest for clients but not currently included in the M-Pesa menu are: savings accounts that earn interest; microcredit services, full interoperability between mobile money operators and banks as well as loan services to agents in order to manage their e-float.
  •   The average income per person of the surveyed population (including children in the household) is 565 MT (approximately US$10 per month) and this has a direct effect on the purchasing power of the respondents. Consequently, most users transact very small amounts via M-Pesa.The study concludes that subsidies will continue to be an option for promoting financial inclusion especially in the rural areas in Mozambique because the return on investment for mobile money operators in rural areas is not attractive (as a return takes more time when compared with urban areas). Adequate and robust incentive schemes are required for promoters to convert the “harder toreach population” into mobile money clients.

    (Dr. Daan Velthausz & Dr. Rotafina Donco)


1 FinScope Consumer Survey Mozambique 2014: Retrieved from 2014.pdf
2 2022.pdf

3 FSDMoç is a six-year programme funded by the UK International Development Agency (DFID) and Swedish International Development Cooperation Agency (SIDA) whose mission is to identify and partner with key market stakeholders, offering targeted investments and insights to promote the financial sector to improve financial inclusion.
4 Non-users in this study are all those respondents who did not use M-Pesa.

Cristian Bouche

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