Expansion of mobile phone usage expanded opportunities to bank the unbanked population. With mobile banking, low-income people no longer need to use scarce time and financial resources to travel to distant bank branches. Since mobile banking transactions cost far less to process than transactions at an automated teller machine (ATM) or branch, banks can make a profit handling even small money transfers and payments. Rwanda is moving towards cashless economy through cashless operation using ICT tools. In Rwanda ratio of e-payments transactions to GDP rose from 0.3 per cent in 2011 to 16.5 per cent in September 2016. One of biggest initiative in direction of cashless economy is Launch of MoKash in partner with Commercial Bank of Africa. MoKash has enabled use of banking services using ICT tools. Major banking services offered are through MoKash includes savings, loans and payments. With MoKash MTN Mobile Money customers save and earn interest and take short-term loans using their phones .MoKash allows MTN Mobile Money customers to borrow as much as 300,000Rwf as well as save as little as Rwf 100, while earning interest of up to 7 per cent. The National Bank of Rwanda being at the centre of driving the cashless economy has been challenging bankers to innovate products and services that are well aligned to the digital era and make it easy and affordable for customers to transact. Such efforts are likely to enhance financial inclusion if technology is well understood and disseminated. But if it is initiated without some basic preparations it will lead to problems like misuse of technology due to information asymmetry. Mobile Banking in Africa Banking through mobile phones has been common in developed countries for years. But the real potential of mobile banking is in to make basic financial services more accessible to millions of poor people across the world. Over last few years there has been enormous growth in usage of mobile money services across Africa. According to MTN Uganda and CBA, more than one million customers had signed up for MoKash, their mobile savings and credit product, less than three months from launch. In sub-Saharan Africa major mobile money servives are provided by Safaricom’s M-Pesa, MTN Mobile Money, Orange Money, Tigo Cash or Tigo Pesa, Vodafone Cash, and Airtel Money. Some countries in Africa like South Africa and Botswana mobile banking services has become an important tool of financial inclusion. In South Africa and Botswana many poor people who do not have a bank account, own a mobile phone and are using mobile banking services for various transactions. Challenges Major challenges faced by mobile banking service providers include adoption among non technical and illiterate users. Again in countries where mobile savings and credit products have been launched, there are only a few mobile network operators that have the bigger market share of customers and have partnered with a few specific financial institutions. This is limiting competition in industry of Mobile banking. Thus there is need to encourage competition. By encouraging competition among mobile banking service providers better service delivery and innovation in industry will be encouraged. Again, over past, there has been rise in Mobile banking related frauds. According to Ghana Chamber of Telecommunications, mobile money operators in Ghana namely, MTN Mobile Money, TigoCash, Airtel Money and Vodafone Cash have recorded 388 money fraud cases in 2016. South African Bank Risk Information Centre (Sabric) has warned bank customers to pay more attention to their mobile security. According to the company, mobile banking fraud is on the rise in South Africa and cyber crime is costing the country $1 billion each year. Recommendations Banking through ICT tools in very helpful in financial inclusion but to make it more effective there is need that proper training in using such tools should be organized. Camps should be organized periodically in all parts of country to reach maximum population. Also people or users should be alerted to avoid misuse of such tools. The writer is a Kigali based economist and consultant.
