M-Dorado: Fact or spoof ?
Have you ever heard of M-dorado? The all-digital heaven, where digital financial service (DFS) transform - improve- people’s lives, make it easier and more affordable to do business, enhance transparency and defy corruption and bad governance. Without jumping the gun, you can say Africa is well on its way to M-dorado. Take Kenya: in 2015, over 15 million M-Pesa mobile money accounts were active and over 58% of the country’s adult population used a digital wallet. At the same time, more than 43 % of Kenya’s GDP was actually transacted via Safaricom’s M-Pesa. Today, there is little you can’t do with M-Pesa in Kenya: buy airtime, send money, settle bills, buy groceries and services, borrow money, withdraw cash, and so much more …
Benin, like most African countries, is NOT Kenya. But the digital revolution is about to happen also in this West African republic! On January 19, 2017, Cotonou hosted the first DFS Working Group of this year. This physical peer-to-peer learning platform set up by UNCDF-MM4P was chaired by Benin’s Ministry of Economy and Finance and the national representation of West Africa’s Central Bank (BCEAO). DFS are expanding in Benin. In 2015, over 1 million e-wallet accounts were active, and DFS active use ratio was over 30%.
The DFS Working Group’s meeting gathered the industry’s major stakeholders: financial services and telecoms regulators, mobile operators, microfinance institutions, banks, etc.; a sign that interest in digital finance can no longer be debated. Another sign that is rarely deceiving was the intensity and quality of the exchanges. The meeting started off with a session on fundamentals of digital finance, so all participants could be on the same page on concepts and definitions. Then came a session on the legal and regulatory framework in digital finance. Participants discussed present regulations in the West African Economic and Monetary Union (WAEMU) on digital payments and requirements imposed on mobile money providers. They also brainstormed on Benin’s present regulations in banking and DFS and looked into compliance and local AML regulations.
Participants then had an extremely rich discussion on DFS’s potential to boost financial inclusion. How do we fast-track new - and working- types of partnerships and products to better address clients’ needs, and boost adoption of DFS for low-income populations?
Last, the meeting focused on challenges/constraints to the adoption of DFS, and notably users’ fear of mis-manipulation (how to get your money back when you send it to the wrong number), or protection against cyber criminals. Many suggestions were made: setting up supporting measures to better manage complaints, improving user interface, menus and functionalities on mobile devices, partnering with police services in charge of cyber-criminality or running massive customer education campaigns.
Here is another positive sign: discussions ended on a consensus to create sub-commissions to follow up on suggestions and, in occasion of the next DFS Working Group meeting, to propose concrete actions to addressing them. All that to demystify digital finance, to boost its adoption and guarantee user security.
M-dorado, here we come!!!