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Mobile phones are replacing bank accounts in Africa

It doesn’t look like the hub of an online bank. But that’s what the yellow and blue metal kiosk becomes when Albert Agane locks himself behind the metal bars every day at 6 a.m.
From his perch along a dusty suburban thoroughfare in Accra, the 28-year-old helps fellow Ghanaians withdraw or deposit cash for accounts they operate from their mobile phones. All they need do is text.
 
Mobile money is the fastest-growing source of income for wireless-network operators like MTN Group Ltd. and Vodafone Group Plc’s Safaricom unit, outpacing data since many Africans don’t have the latest smartphones. They need agents like Agane because ATMs and bank branches are out of reach, or too costly.
“In a village, where there are no banks, you can go to an agent and transact,” said Agane, who earns a commission of about 1 percent for moving as much as 20,000 cedis ($3,700) a day. “Once people have phones there’s no need for a bank account.”
The service has become an indispensable part of how Africa’s 1.2 billion people live, from buying funeral cover to borrowing money. The number of registered users in Ghana soared 11-fold between 2013 and 2017, International Monetary Fund data shows. Across the continent in Kenya, where it was pioneered, the value of such transactions amounts to almost half of gross domestic product, according to the World Bank.
Mobile money in Accra, Ghana. Photographer: Andre Janse Van Vuuren/Bloomberg
Sub-Saharan Africa has more mobile-money accounts than anywhere else in the world with about 396 million registered users at the end of 2018, a 14% increase from a year earlier, according to the GSM Association. As it catches on around the world, South Asia saw 29% growth in 2018, and it was 38% for East Asia and the Pacific.
“There are a lot of partnership opportunities with immense revenue potential for both mobile-network operators and banks,” said Patrick Quantson, head of digital transformation at the Accra-based unit of Standard Bank Group Ltd., Africa’s largest lender. “The mass appeal of mobile-money services and the mode of delivery also presents an opportunity to scale financial products to all market segments, at incredibly lower costs.”
It’s easy to see why Agane—one of 182,000 mobile-money agents—is busier than the ATMs around Ghana’s capital city. There are more than 1,740 such outlets per 100,000 people in the country, compared with only 11.7 ATMs and 8.7 bank branches, the IMF data show.

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