Zambia's central bank believes the increase in mobile phone banking will help overcome the long-standing challenge of reaching out to the unbanked population of the country.
Austin Mwape, central bank deputy governor of operations, said at the unveiling of Airtel Money by telecoms operator Bharti Airtel that the advancement in telecommunications would assist the financial sector to capture more of the unbanked market in the country.
Mwape said mobile phone banking was benefiting the financial sector, as it was now able to offer more products and services to clients.
Airtel Money is a mobile phone service that allows Airtel subscribers to make various transactions, including sending and receiving money, paying utility bills and shopping using a mobile phone.
Mwape said the central bank was not in favour of increasing cash transactions for all services, and that Airtel Money brings yet another alternative payment system.
Mobile banking in Zambia has attracted low-income populations often residing in rural areas that may not be able to afford a traditional bank account.
Various studies have shown that the uptake of financial services among Zambians is low. “The coming up of Airtel Money and other mobile banking services would contribute positively towards financial inclusion,” said Mwape.
Using Airtel Money, people can transfer money, even if they do not have a bank account, in the form of phone airtime, which can be redeemed at the nearest Airtel centre.
Fayaz King, MD of Airtel, said Airtel Money would transform the Zambian banking sector, as it would offer a reliable, convenient and fast money transfer service. “We are not just launching a brand name, but a commercial platform that will transform the banking sector,” said King.
Airtel is on the brink of crossing the landmark of 1 000 Global System for Mobile communication sites with four million customers, and has connected several remote rural areas that had remained unconnected.
King believes the remote rural areas will give Airtel Money a competitive advantage over other mobile phone financial services.
In June this year, Airtel and Ecobank agreed to launch a wide range of mobile financial services across Africa, including person-to-person (P2P) and business-to-business (B2B) under the brand names 'Ecobank Mobile' and 'Airtel Money'.
As in other parts of Africa, Zambians are using mobile financial services to buy goods, pay utility bills and buy mobile airtime, as well as for sending and receiving money.
With the unveiling of Airtel Money, competition is expected to be stiff as MTN already provides mobile money services, having launched MTN Money a few months ago. MTN customers registered for the service receive money through Western Union money transfer transactions on their mobile phones.
The rise in mobile money services has been fuelled by the increased accessibility of mobile phones, both in rural and urban areas, as operators try to capture customers in rural areas to increase their customer base and improve on their balance sheets.
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