Monday, September 23, 2013

Making Sense of Mobile Money in Urban Ghana: Personal, Business, Social, and Financial Inclusion Prospects

By Vivian Afi Dzokoto based upon her IMTFI-funded research project with Elizabeth Appiah

The goal of the current study was to explore personal, business, and social money-related practices that have emerged with increased patronage of mobile money (MM) in Ghana.  Of particular interest was the impact of MM on the urban poor who so far (based on previous research) appear to be the sector of the population that is the least aware of MM and the least likely to use it in their daily lives.

We (i) investigated MM 2012 uptake patterns, in year three of its re-introduction to Ghana, (ii) explored the social and cultural interfaces between MM and existing money behaviors, and (iii) investigated the internalized (cognitive) representations of MM that Ghanaians have developed. The study focused on the segments of the Ghanaian population and behavioral practices that were perceived as both included and excluded from the MM adoption process. Research to answer these questions was conducted using surveys, spending diaries, interviews, and analysis of secondary data.

"Transfer Money Instantly to Loved Ones with Mobile Money" (retrieved July 3, 2013 from

Highlights of Results

Study 1: Adoption of MM into Personal Financial Practices, A Quantitative Inquiry

Monetary Preferences Study: Cash was the most preferred monetary tool in a college student sample. Prepaid phone cards were preferred over other cashless forms, and MM was preferred over many other forms of cashlessness and also higher denominations of cash.

Spending Diary Study: In a college student sample, cash was the predominant form of payment for daily expenses while non-cash transactions made up 2.86% of reported purchases. MM accounted for less than 1% of transactions.

Mobile Money Use Population Survey: 14% of respondents reported using MM at least once in order to receive a money transfer and/or send a money transfer, pay bills, make purchases of goods, and purchase airtime. MTN was the most popular mobile network operator (MNO).

Industry Data: Participants in the MM industry reported an increase in transaction frequencies and the volume of transactions over the course of the fiscal year.

Study 2: Adoption of MM into Personal Financial Practices, A Qualitative Inquiry

Interviews with Individuals in the MM industry: Interviewees cited regulatory, agent, educational, pricing, and profitability issues as barriers to MM uptake, but respondents were optimistic about the potential for growth in the MM industry in Ghana.

Interviews with Consumers (both users and non-users of MM): Participants expressed an overall preference for cash over MM, and displayed a lack of trust of MM, yet basic knowledge of MM was higher than in previous years.

Interviews with Early Adopters: First use of MM occurred in a situation where the individual had an urgent need to send money to someone in another part of the country. Nine out of 10 participants used MM again after this initial experience.

Interviews with Retailers: Retailers predominantly used cash over MM in commerce because of lack of trust (e.g. mobile network problems and concerns about fraudulent activity), yet knowledge of MM among retailers had increased.

Mobile Money in the Church: The nature of MM (intangible and mobile-phone based) made it undesirable for incorporation into church activities (including funerals and weddings).


The results of this series of studies revealed the following:

1. Cash is King in Ghana: Cash is still the main form of payment for day-to-day purchases. Large payments generally involve involvement of the formal banking sector. Cashless payment forms have not yet begun to dominate the payments scene.

2. MM knowledge and use has increased, but MM has not become a major means of payment for goods and services, or for savings.

3. MNOs have increased the number of MM products available to the public, slowly creating a MM ecosystem. However, apart from money transfer, this ecosystem is largely targeting the middle and upper classes.

4. Barriers to MM uptake remain: Information gathered from interviews indicates the persistence of regulatory, partnership, and educational barriers that hamper the growth of the MM industry in Ghana.

In conclusion, the answer to the question of how Ghanaians from different socio-economic backgrounds are making sense and use of MM in urban Ghana in their personal, business, and social lives is a simple one. The use of MM is increasing over time, and the commercial settings in which MM can be used are slowly growing due to the development of new products and business partnerships, but cash remains the major means of payment in urban Ghana. Also, the majority of the MM products are aimed towards the middle and upper classes to the exclusion of lower income groups. For instance, willingness to use MM especially in markets was low at the time of data collection. It is therefore hoped that as the MM ecosystem grows, new products that benefit lower income segments of society will be developed.

Socially, MM is gradually establishing itself as a means by which individuals can fulfill their financial obligations to extended family members in financial need.  Apart from sending remittances, however, these series of studies indicate that MM has not widely permeated the social sphere, and thus has not had a salient impact on social life (e.g. churches, funerals, weddings) so far. Whether or not this will change over time remains to be seen.

1. Link to their final report: Making Sense of Mobile Money in Urban Ghana: Personal, Business, Social, and Financial Inclusion Prospects.

No comments:

Post a Comment