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Mobile Money Soars in Sierra Leone Amidst COVID-19 Pandemic
Freetown, Sierra Leone - The digital financial inclusion space has seen significant growth globally, with Africa and Asia leading the charge. In Sierra Leone, mobile money transactions have increased by 47 percent, with over $1 billion processed daily.
Growth of Digital Financial Services in Sierra Leone
According to a recent report by the GSMA, the number of registered DFS accounts grew by 63 percent in 2020, reaching 4.8 million in December. The report also notes that the COVID-19 pandemic has accelerated the shift towards digital financial services, with customers increasingly using mobile banking, mobile money platforms, and internet banking.
UNCDF’s Support for Digital Financial Services
The United Nations Capital Development Fund (UNCDF) has been providing technical assistance and investment grants for DFS since 2014. The organization has noted a significant increase in the number of active merchants, from 291 to 1,300, and registered DFS accounts, which grew by 47 percent between December 2019 and December 2020.
Key Factors for Success
The report highlights the importance of:
- Improved access to digital infrastructure
- Greater financial and digital literacy
- Consideration of consumer and data protection principles
- Interoperability among players nationally and across borders
Industry Developments
Microfinance institutions (MFIs) are beginning to embrace digital payment, with one MFI deploying staff as mobile agents to market centers to process basic transactions for clients using a tablet-based application. Two additional MFIs are piloting projects using USSD and mobile money/bank integration.
Commercial banks have also launched DFS operations in Sierra Leone, bringing the total number of commercial banks offering DFS to 10. Bank and mobile network operator integrations and API sharing are increasing among industry players, allowing for transactions between bank and mobile money accounts.
Conclusion
The report concludes that the emphasis on simplifying processes and protecting the customer is crucial for the continued growth of DFS in Sierra Leone. The guidelines on tiered know-your-customer requirements published by the Bank of Sierra Leone have created many new opportunities for providers and customers in the banking industry.
Key Statistics
- $1 billion processed daily
- 4.8 million registered DFS accounts (December 2020)
- 63% growth in registered DFS accounts between December 2019 and December 2020
- 110% annual growth in the number of people working in DFS departments
Quote
“The digital financial inclusion space has seen significant growth globally, and Sierra Leone is no exception. The COVID-19 pandemic has accelerated the shift towards digital financial services, and we expect to see continued growth in this area.”
- [Name], UNCDF Representative in Sierra Leone