26 Jun 2019

Botswana has a lot to learn from Kenya, the country that pioneered mobile money services in Africa through MPESA.    Former Kenya central bank governor, Professor Njuguna Ndung’u said the digitisation of the financial sector allowed for economic transformation.

Speaking at a panel discussion during the IMF/Bank of Botswana Bali Fintech Agenda Conference in Gaborone on Monday, Professor Mdungu’u, now the executive director of African Economic Research Consortium, said electronic payments were better than cash as they saved 50 per cent of transaction costs.

This, he said,  was despite the fact that people preferred cash because “they feel that they are in control of their finances.”

The introduction of e-money services covered those previously financially excluded, especially those living in rural areas. It had also alleviated women from poverty. Through the financial technologies, remittances and trans-border transactions were working well, he said.

Still on mobile money, Mr Levi Nkata, managing consultant at IT firm, Idelan Consulting said it was a game changer as the platform had enabled people who previously did not have bank accounts to save money.

He said mobile money has penetrated the market more than banks as the services did not need brick and mortar buildings and could be accessed from anywhere.

He said it was disturbing that there were people who still preferred cash such that they opted to withdraw money from automated teller machines (ATMs) to undertake shopping although point of sales services were available at shopping outlets. “However, all this depends on consumer behaviour as they are committed to their banks and only utilise automated teller machines (ATMs) from their banks,” he said.

Mr Nkata noted that cheques were no longer popular as they were replaced by electronic funds transfer (EFTs).

He said ATMs  were secure but expensive for banks as they required physical structures, security personnel and people to keep inserting cash.

He said time had come for banks to share services, adding that transaction costs resulted with consumers sticking to their banks. For his part, Mr Martin Lindpere, advisor to World Bank executive director, said a digitised country stood to benefit, giving the example of Estonia where 99 per cent of government services were conducted online, with the remaining one per cent for marriages, divorces and property sales. ENDS