Senegal: A Unique Ecosystem of Branchless Banking in West Africa

14 August 2012
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This post kicks off a three-part series this week on the CGAP and the Mobile Money for the Unbanked blogs on the topic of mobile financial services in francophone West Africa.  This short series will feature prominent voices from the region and discuss new developments and implications for the industry as a whole.

Ecosystem is a popular word that is increasingly thrown around financial inclusion circles in the last couple years…and for good reason. To provide a range of financial services to various segments of the unbanked population, one provider, one delivery channel and one business model will never be sufficient. As we looked around the conference room at the BCEAO headquarters in Dakar, Senegal recently, it was clear that an ecosystem was emerging in this West African country.
The Central Bank of West African States (BCEAO) organized the first Regional Consultation on Mobile Banking at the end of June in Dakar, assessing developments in the field of mobile banking in the West African Economic and Monetary Union (WAEMU). This major event provided the first real opportunity for regulators to engage with the main players in the mobile banking industry, namely the MNOs, commercial banks, microfinance institutions, nonbank e-money issuers, and other government agencies.
The BCEAO, which regulates the 8 countries in WAEMU, was an early mover among central banks globally when it came to branchless banking. As early as 2006, they issued regulation on electronic money, creating the regulator space for nonbanks to receive an e-money issuer license.
Now 6 years later, 12 branchless banking initiatives have currently launched in 6 of the 8 WAEMU countries. But among all these countries, Senegal is known for the diversity and richness of its market. Indeed, in Senegal there is the broadest range of actors and branchless banking business models, showcasing an emerging ecosystem that includes the following players.
That’s quite an ecosystem if you ask us! It includes commercial banks, MFIs, mobile operators, nonbank e-money issuers, third-party providers, technology companies, switches, government ministries and donors. However, a few market characteristics appeal to our curiosity, mainly the extent of Senegal’s strong market potential and its advantage in “housing” many of the regional institutions. The initial results in the Senegalese market show that there were approximately 800,000 registered customers with a mobile account at the end of 2011, almost 2 years after the first deployments launched. Senegal’s population is 12.5 million people, so there is still a huge market to be tapped, but also a deeper understanding of customer financial activities and needs.
Additionally, SGBS was the first mover among commercial banks in WAEMU to offer its own solution for mobile money. FERLO was the first nonbank to issue e-money, with subsequent ones following in Burkina Faso and Cote d’Ivoire. The microfinance sector in Senegal is one of the more developed and mature in the region. But while GIM-UEMOA is headquartered in Senegal, its GIM-Mobile platform is designed to impact the entire 8 countries in the region. The same could be said for [email protected], which is present in all 8 countries. So many business initiatives that have launched in Senegal have the potential to impact the entire region.
These are just some of our early musings about the unique aspects of mobile money in Senegal. But there is also a lot happening in the rest of the region, and we will highlight some of these exciting developments in subsequent posts. Suffice it to say that despite the relatively young branchless banking industry in Senegal, it is already quite competitive. An ecosystem of different actors is emerging that promises dynamic innovation that we all hope will lead to sustainable solutions that bring financial services to those that need them most.


Submitted by Andjelo C. M on
We believe that can add value to the existing solutions in the emerging African markets whereas the African Diaspora in North America can bring their friends, families and business closer. Our a social payments startup from the US allows users to connect up to five “allowance” or pre-paid cards to a primary bank account. While M-Pesa is top of mind as Africa’s go-to financial service for the unbanked, there’s potential on the continent for an MoZiki-like service. Mozikicard requires that only one user has a bank account — cards linked to the primary account are all pre-paid and can be used anywhere Visa debit cards are accepted or at ATMs. It’s useful for setting up auto allowances for family members, managing spending or budgeting, putting money away for emergencies or paying the babysitter — essentially any situation that could do without the bank account overhead. Money can be transferred, instantly (for free) or scheduled and sent via email, Facebook, or SMS. MozikiCard is also going after financial institutions. Think per diems — again in an African context, for an unbanked workforce — petty cash, or avoiding the liability of corporate credit cards.

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