Mobile money usage shrinks | The Times Group

post was last updated: May 16, 2019

By William Kumwembe:

Use of mobile money services went down in the first quarter of 2019 despite the country registering a rise in subscriber base, figures from the Reserve Bank of Malawi (RBM) show.

RBM’s National Payment System 2019 First Quarter Report shows that activity rates continued to be low, as only 39.7 percent of the total mobile money subscribers used the service.

This is compared to 41.1 percent recorded during the fourth quarter of 2018.

RBM attributes the drop in the activity to “seasonal factors”.

“With regard to usage, airtime top up and cash in/ out transactions continue to dominate on the mobile money platform, suggesting that the majority of the customers have not fully embraced this service for day to day transactions for payment of goods and services, for instance at merchant shops and for utility bills,” RBM says.

However, the number of registered mobile money agents rose by 10.1 percent to a total of 43,406 in March 2019.

About 59.3 percent of the agents were recorded as active during the first quarter of 2019 compared to 71.2 percent in the last quarter of 2018.

In terms of distribution, 74.1 percent of mobile money agents are located in urban and semi-urban areas, with only 25.9 percent located in rural areas.

This partly reflects the challenges to access to financial products and services faced by people in rural areas across the country.

Meanwhile, the RBM Report has also shown that the Malawi Interbank Transfer and Settlement System, which is the country’s only settlement system for financial and securities transactions, recorded reduced performance during the time under review as both the volume and value of transactions processed declined by 11.9 percent and 6.0 percent to 1.3 million and K6, 070.9 billion, respectively.

In contrast to previous quarters, transaction flows in retail DFS channels experienced a reduction in both the total volume and value processed, as they declined by 2.0 percent and 3.0 percent to 63.2 million and K771.7 billion, respectively.

However, when these figures are compared to a similar time in 2018, the total volume and value of retail DFS transactions showed significant upward movement as they rose by 60.0 percent and 86.8 percent, respectively.

“This trend suggests that, in general, the public is steadily embracing electronic methods of effecting payments, with the slight drop in numbers during the quarter under review attributable to seasonal fluctuations,” reads the RBM report.

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