Sierra Leone made significant gains in the area of digital financial services (DFS) in 2018. The number of registered DFS customers increased by more than one million, from 4,214,866 in 2017 to 5,438,888 in 2018. Additional growth in DFS adoption and usage is expected in 2019 as providers consider and implement changes in strategy.

Despite this growth, primarily driven by customers in major towns and cities, there is still a need to improve access to and usage of DFS among new and existing customers, including previously excluded segments of the population such as rural inhabitants, women and youth. For instance, only 8% of women and 15% of men have a bank account in Sierra Leone, according to a survey of smallholders conducted by the UN Capital Development Fund (UNCDF) in partnership with the Ministry of Agriculture and Forestry and funded by the European Union through the Boosting Agriculture and Food Security project.

Informal financial services remain the go-to solution for most smallholders in Sierra Leone, with under-the-mattress savings at the top of the list. While banks are considered a safe investment, saving at home is more convenient as money can be quickly accessed in an emergency. Among women, 62% of those who said they did not have a bank account considered minimum-deposit requirements to be too high. A few women surveyed even reported having no knowledge of banks and the services offered there.

Traditional financial services are still barely accessible in remote rural areas of Sierra Leone—where most smallholders operate—so they do not seem to be the most appropriate modality to make finance available to farmers. Providers could leverage DFS to close the access gap since they offer the advantages of informal services without the limitations and the operation costs of formal institutions.

There is an opportunity for DFS providers to offer innovative solutions that better meet customer needs and drive regular usage of affordable and accessible financial services. UNCDF developed an Annual Provider Survey that aggregates DFS industry data in the country over a year. This report, which is based on the survey results, provides industry participants with a comprehensive view of the state of the DFS market in Sierra Leone. It aims to deliver relevant information to DFS stakeholders so that they can make informed decisions regarding the growth of the industry.

The 2017 Annual Provider Survey inspired many industry stakeholders to work even harder to drive financial inclusion in the country and make the DFS market more competitive and responsive to Sierra Leonean customers. UNCDF hopes to do the same with the 2018 report. Under the new strategy of ‘Leaving no one behind in the digital era,’ UNCDF will continue to work with various players and support multiple key industry initiatives such as improved data analytics, greater incentives that drive increased activity among customers and agents, better agent network management and more innovation. UNCDF will also focus on building inclusive digital economies by empowering youth, women, migrants and micro-, small- and medium-sized enterprises—customer segments that are often marginalized and denied digital innovations. UNCDF is very encouraged by the results thus far achieved and remain committed to providing support to our Sierra Leonean partners in order to enhance stakeholders’ understanding of, interest in, and willingness and ability to develop, improve and expand DFS in the country. Read the report here