Mobile-based financial services have become more common in sub-Saharan African countries, particularly in Kenya. Cellphone availability has played a significant role in making financial services more accessible to all segments of the population. Low-income sectors of the population have made measurable strides towards financial inclusion thanks to microfinance companies. However, sub-Saharan African states continue to lag behind other developing nations.

While many more people now own cellphones, particularly women and members of lower-income classes, financial institutions have yet to really offer good mobile payment options. When mobile banking becomes easier, substantial progress will be made towards closing the income inequality gap caused by the lack of traditional financial services.

In addition, although the number of locally-owned banks in sub-Saharan countries has grown, these pan-African banks, like many new and fast-growing financial enterprises, must better strengthen their internal control systems, management, and transparency.

More Work Still Must Be Done

Overall though, sub-Saharan African countries still have much more room for improvement with their financial services. There are considerable differences between their level of financial development and that of other regions with similar characteristics. The more pathways to financial services created, the more the economic standing of both individuals and national governments will improve. Therefore, improving the financial inclusion ratio throughout these countries’ populations is vital to their financial health.

How Can Policymakers Help Sub-Saharan Countries Reach Their Potential?

The progress that the region has made financially has been in large part due to the implementation of more sound macroeconomic principles. Sub-Saharan financial institutions and governments, however, have been inadequate at best and obstructive at worst when it comes to applying proper oversight and regulations.

Mobile banking, which could be subject to fraud if left unprotected, should also be monitored effectively so that the emerging system not crumble on account of distrust and a lack of security. When transactions can be conducted smoothly yet safely and people can more confidently save money or take out a loan to start a business, the region’s economy will move forward and everyone will reap the benefits.