Mobile money services; a threat to banks?
From a relatively unexplored service, today mobile money is considered to be one of the country’s fastest growing financial service to improve financial inclusion in the unbanked rural areas.
As banks focused on traditional banking services, telecoms saw the opportunity since 60% of Uganda’s population resides in the rural areas and this is unbanked. And this is why mobile money could be a threat to other financial providers especially banks. Setting a bank branch is costly. But also, the growth of the banking sector has been restricted to retail banking alone. This means that the bank branch should be set up an area where people are able to borrow and save money with the bank. This is not the case for rural areas. For mobile money, one only needs a phone and a small table to be operational.
Banks, it’s time to revise your strategies.