Mobile Money and Digital Financial Inclusion in Senegal

  • June 29, 2017

  • Dakar, SENEGAL

By Joy Kim, Financial Inclusion Analyst (MIX) and Sabine Mensah, Technical Specialist Digital Finance (UNCDF)

For more information, please contact:
Bery Kandji
KM Consultant, Senegal

Sabine Mensah
Regional Technical Specialist, Digital Finance


Last year, in a blog post titled 10,000 Data points: New Senegal Workbook Explores Access at the Commune Level, we explored the state of financial inclusion in the West African country. Through that analysis of access point distribution, we uncovered a few key findings, including the major growth of mobile money access points and Senegal's impressive progress in financial inclusion since signing the Maya Declaration in 2012. With the recent release of the updated Interactive Dashboard for Senegal, it seems like a good time to revisit the state of financial access in the country and examine what has happened over the past year.

The central role of digital financial services in Senegal has, if nothing else, become more defined as the market continues to evolve. For one, Ecobank launched a mobile banking app for customers and Masterpass QR codes for merchant payment. Additionally, Wari, a money-transfer and bill payments service provider has announced the acquisition of SENTEL GSM (Tigo) the second largest telecommunications firm in the country. And Société Générale Bank is planning to launch a mobile money offering soon. But even for the established operators, growth continues; Orange recently registered its 10 millionth customer on its mobile payment platform, Orange Money. Finally, it is becoming clear that mobile money is an indispensable tool for many Senegalese, even becoming one of the preferred methods to purchase sheep for the Muslim holiday Eid al-Adha.

Given these developments, it is unsurprising that mobile money continues to drive financial inclusion in Senegal. Last year the median number of access points per 10,000 people was 3.8; this year that number increased to 5.2 (see graphs below). The data we collected shows that over 81 percent of financial access points belong to mobile network operators and, additionally, mobile money access points grew by 37 percent over the past year. All regions within Senegal experienced growth in mobile money indicating the widespread impact mobile network operators are having throughout the country. In terms of the number of new access points, the three most populous regions saw the largest growth with Dakar adding over 1,100 new access points from mobile money alone.

However, there is still opportunity for mobile money to expand its reach. In a handful of regions – Fatick, Kaffrine, Louga, Thies and Diourbel – people get paid in cash more than the rest of the country (see chart below). If mobile network operators can encourage the digitization of wages, they could also grow the number of access points in those areas, providing increased security for individuals and greater revenues for agents. Additionally, similar to our findings last year, there are still underserved populations living in urban areas. When drilling down to the commune level in Dakar, for example, many areas within the city have unmet demand for financial access points.

For the rest of the financial services ecosystem in Senegal, the financial access points offered by other types of financial service providers decreased by 3 percent over the last year, even if these institutions still provide valuable products and services to various populations throughout the country. Our analysis found that microfinance institutions in Senegal have a denser presence in areas with high poverty rates when compared to commercial banks, perhaps due to products tailored to their needs. The appropriate mix of financial services should be a key consideration for operators looking to expand within the country. And to that end, partnerships between operators and microfinance institutions are necessary in order to extend the second-generation of digital financial services (DFS) products such as digital credit, savings and insurance in underserved areas in Senegal.

The UNCDF’s Mobile Money for the Poor (MM4P) program, launched in Senegal in April 2015, and in partnership with The MasterCard Foundation, provides support to build a robust DFS ecosystem that reaches low-income people in least developed countries (LDCs).

MM4P is committed to improving financial access points in Senegal particularly in rural areas. Through a deep dive analysis of the Interactive Dashboard for Senegal, the following 10 departments were identified for assistance in agent network expansion based on gaps in financial service points and economic opportunities for viable agent networks: Nioro, Podor, Fatick, Bambey, Foundiougne, Velingara, Linguere, Kanel, Kaffrine, Guinguineo. For 2017, MM4P will be supporting an aggregator to increase the active number of mobile money agent networks in those targeted areas.

With an estimated 15 percent of adults currently with access to an account, the country has a long way to go in reaching full financial inclusion. It is likely, given what we’ve seen, that digital financial services will continue to increase the number of access points. It is also important that Senegal keeps its focus on connecting its underserved and excluded populations to appropriate financial services.

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