Across countries in Africa like Tanzania and Senegal, only 33% of adults have access to a bank or other financial institution, and the situation is even worse for women, for whom the rate is a mere 27%. This lack of financial inclusion has led some to propose digital technologies as a solution, such as mobile money, which allows people to use their phones to make or receive payments.
In recent years, more than 157 mobile money operators have become popular across Africa. However, some significant barriers still exist that contribute to inequalities in who can use these services. These barriers include lack of access to a mobile phone, expensive airtime, lack of financial literacy, and the infrastructure for reliable service needed to make financial transactions.
Surveys conducted in 2016 found that the wealthiest 20% of the population were up to 21 percentage points more likely to use traditional finance than those in the poorest 20% and up to 16 percentage points more likely to use digital finance. Mobile phone towers were concentrated in major cities, and mobile phone service was poor and unreliable in rural areas.
The International Monetary Fund found that 63% of automated teller machines and 64% of points of service for traditional financial institutions in Senegal were located in Dakar alone, and a 2020 survey covering Tanzania alone found that 19% of those who did not use a bank said that this was because it was too far away.
Clearly, the divide between the rich and the poor is widening. Governments and service providers must remove these barriers to make financial services accessible to all. It is a tragedy that access to financial services has become so complicated and costly, and we must do all we can to ensure everyone has the same opportunities to make their financial dreams a reality.
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