By Joy Kim, Financial Inclusion Analyst (MIX) and Sabine Mensah, Technical Specialist Digital Finance (UNCDF)
Regional Technical Specialist, Digital Finance
Though Benin hasn't seen the same rapid growth in digital financial services as its neighbors, the country's small starting base means even bigger potential gains. As a member of the West African Economic and Monetary Union (WAEMU), Benin could learn from the experiences of fellow member countries including Senegal and Cote d'Ivoire, where mobile money plays a leading role in access to finance. In fact, access point data collected by MIX shows signs that Benin may already be following in the footsteps of Cote d'Ivoire and its mobile money turnaround story.
Benin is considered a nascent market when it comes to digital financial services but that may be starting to change. Since we last updated the Interactive Dashboard for Benin in 2016 (based on 2015 data), mobile money access points have increased by 118 percent. With the exception of Couffo, which saw no growth, all departments experienced an increase between 50 percent (Mono) and 250 percent (Atlantique). According to our data, the number of access points in Atlantique grew by over 2,000 while Littoral added 1,900. In Atlantique, the number of service points per 10,000 people increased from 7.93 to 24.48 over the past year. And, in terms of channels, the number of agent access points grew across the country by nearly 7,000 over the same time period. While the number of access points of other financial service providers grew slightly – microfinance institutions, banks and post offices together added 138 access points – mobile money growth resulted in doubling the median number of access points per 10,000 people, from 6.02 to 13.22.
Unsurprisingly, then, mobile network operators are the most prevalent type of financial service provider in Benin in terms of access points. These operators are the most widespread across all departments representing over 93.7 percent of all access points in the country, up from the 88.7 percent recorded in our previous update. Yet there is still opportunity to expand in Benin where only 17 percent of adults have a bank account. For one, mobile network operators could investigate communes with a higher percentage of households with access to the internet and a low number of financial access points. These communes, including Ouinhi, Gogounou and others, seem to be home to active users of mobile phones but with limited access to financial services.
As we mentioned last year in our post Partnerships for Progress: Benin Could Benefit from Financial Sector Coordination, mobile network operators should continue looking for opportunities to work with other financial service providers. For example, microfinance institutions are doing a better job at covering communes with high percentages of agricultural households, the leading economic activity in Benin. Also, microfinance institutions are "prioritized by the government in its poverty reduction strategy" and are already adding mobile money access points, a welcome trend over the last year that should be continued. Launched in October 2015 in Benin and in partnership with The MasterCard Foundation, UNCDF’s program Mobile Money for the Poor (MM4P) is committed to supporting microfinance institutions in their journey to leverage digital technology to improve financial inclusion in rural areas. MM4P has invested in several capacity building workshops and agent network training for numerous microfinance institutions in Benin. The program is also working to facilitate the first bank-to-wallet integration between an operator and a microfinance institution in the country.
Because of its membership in WAEMU, Benin can enjoy many of the benefits of proximity and deepening relationships with the regional leaders in financial inclusion. Stakeholders have clearly demonstrated their willingness to boost the ecosystem in Benin. In March 2017, MM4P organized a retreat with the Government that harmonized the vision of stakeholders on digital finance, and encouraged the prioritization of projects that can promote digital finance services in Benin.
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