Cameroon

Mobile Banking in Cameroon Increases Access to Financial Services

Publication Date

Mobile Banking in Cameroon Increases Access to Financial Services

Publication Date

BAMENDA, CAMEROON – Mdubila Pascaline, 29, is a journalist in Bamenda, a city in northwestern Cameroon. She says she sends some of the money she earns to her mother – simply by using her cell phone.

Her mother lives in Mbiame, a remote village that is more than five hours away from Bamenda by car. She does not have a bank account, but she can collect money from her daughter with just her phone.

“It’s very efficient and cost-effective,” Pascaline says.

Pascaline subscribed to the service at the MTN Cameroon mobile service provider in her town and received a code to text to her mother. She bought airtime worth 10,000 francs ($20) and transferred the money to her mother via cell phone. Using the code, her mother collected the money at the MTN Cameroon service center in her village.

For this transaction, Pascaline paid a fee of 100 francs (20 cents), which she says is cheaper than transferring the money using a bank account.

“With local banks, the transaction costs 500 francs,” Pascaline says, which is the equivalent of $1.

Mobile phone companies and banks are teaming up to provide mobile financial services to the citizens of Cameroon, enabling them to use their cell phones to transfer money and pay bills. In addition to increasing convenience, financial experts say that the growing phenomenon of mobile banking has the potential to erode poverty by connecting citizens without bank accounts to financial opportunities. The development of these services faces challenges though, such as poor network connections, power outages and low awareness.

This year, about 1.7 billion people will have mobile phones but not bank accounts, according to predictions by the Consultative Group to Assist the Poor, an independent policy and research center housed at the World Bank that is dedicated to advancing financial access for the world’s poor.

 

Petipe Paterne Aimé, a microfinance expert who lectures on the topic at the Catholic University of Cameroon, says Cameroonian banks, such as Banque Internationale du Cameroun pour l’Epargne et le Credit, are forming partnerships with mobile phone operators to provide mobile financial services. Paterne applauds this step as mobile phone operators have a wider reach than banks because more people have cell phones than bank accounts.

 

Local phone operators have launched various mobile money services thanks to this partnership. MTN Cameroon has introduced MTN MobileMoney, an electronic wallet that enables users to send and receive money via their cell phones. Another mobile phone service provider, Orange, has launched Orange Money, its mobile money service that allows customers to pay bills through their cell phones.

 

One such customer is Ndi Apollinaire. Working from 5 a.m. to 8 p.m. daily as a taxi driver in Bamenda, he says he does not always have the time to go and wait in line at Applied Energy Services-Société Nationale d’Electricité du Cameroun, the electricity service provider, to pay his electricity bill. So he is excited about the new option to pay his electricity bills through Orange, his mobile phone service provider.

“I have paid my bills through Orange once,” he says.

He says there are still a few kinks to resolve, but he is confident in the future of this system.

“The second time I tried it, the transaction did not go through, and I lost some of my credit money,” he says. “The service is new and am sure Orange and AES will work on it so that it is more efficient.”

 

In addition to being efficient, finance experts here say that mobile banking could be a key solution to help people out of poverty.

 

Paterne says the new mobile banking services allow Cameroonians to safely and cheaply send money to family and friends throughout the country or pay bills using a mobile wallet. Further development of mobile banking services could enable more people to access savings acounts, receive and repay loans and pay insurance premiums.

 

The new access to these financial services could develop the economic activities of the poor, he says. Mobile financial services mean that poor people who have cell phones but no bank accounts could have more access to microloans, insurance and tailored investment opportunities – services they are typically denied.

 

Andin Ban works for a major sales partner of Orange and Orange Money. She says that there are few requirements necessary to benefit from Orange Money. Clients must be 15 or older, be identified owners of cell phone numbers and have photocopies of their national identity cards. The subscription to Orange Money is free.

 

Mobile banking is changing the speed of personal and business banking in Cameroon and has the potential to grow. But in spite of these innovations, challenges to its development still exist, as Apollinaire’s experience shows.

 

Paterne says that to make the most of opportunities offered by mobile banking, mobile phone operators need to regularize their services. There are days when clients are unable to make calls or receive text messages because of poor network connections.

 

Blackouts, which can last the whole day, are also common in Cameroon. During a blackout, people can’t charge their phones to access the financial services.

 

Companies may also need to find more effective ways to explain the terms and conditions of the new services, as some mobile users are still hesitant about using their phones for banking.

 

Manka’a Sharon, 30, is a warehouse manager at a social marketing company. She says she uses her cell phone exclusively for phone calls and text messages, despite weekly notifications from her mobile phone company announcing new services and products.

“I usually don’t want to read through the details of the notifications,” she says. “I only use my phone to make or receive calls and to send text messages.”

Sharon says she has heard about offers to use her phone to pay electricity bills or transfer money, but she is wary of them.

 

“Most of the offers by the phone companies sound like ‘jambo,’” she says, using a Cameroonian Pidgin English word for gambling.