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Mobile Money Adoption Doubles in Sierra Leone, But Financial Inclusion Remains Elusive

Freetown, Sierra Leone - Despite progress in financial inclusion, Sierra Leone’s poorest population continues to rely heavily on alternative financial tools due to high levels of financial exclusion.

Progress and Challenges

According to a recent study, the use of mobile money has more than doubled from 11.6% in 2017 to 21.78% in 2021. While this increase is a positive sign, it still lags behind the Sub-Saharan African average of 54%. Moreover, the majority of financially included individuals have only completed primary school education, highlighting the need for more inclusive financial solutions.

Financial Inclusion Remains Limited

The study found that while 37.96% of the poorest 40% are now financially included, this increase may be attributed to population growth rather than actual inclusion. Furthermore, the percentage of relatives who own bank accounts has only increased from 4.56% in 2017 to 5.66% in 2021, suggesting that financial inclusion remains limited.

Informal Borrowing Remains Prevalent

The survey also revealed that wages and transfers have not improved significantly over the past four years, leading many people to rely on informal borrowing from family and friends rather than formal financial institutions.

Key Findings

  • Mobile money adoption has doubled from 11.6% in 2017 to 21.78% in 2021.
  • Financial inclusion remains below the Sub-Saharan African average of 54%.
  • 37.96% of the poorest 40% are financially included, up from 35.1% in 2017.
  • Only 5.66% of relatives own bank accounts, a slight increase from 4.56% in 2017.
  • Wages and transfers have not improved significantly over the past four years.

Recommendations

For Financial Institutions

  • Prioritize outreach programs to remote areas and provide more accessible services.
  • Offer more inclusive financial products and services.

For Government

  • Implement policies to reduce interest rates and streamline documentation processes.

By addressing these challenges, Sierra Leone can work towards achieving greater financial inclusion and reducing poverty among its poorest population.