Governments across Africa need to come up with more policies to safeguard mobile money transfer platforms, a new report sponsored by the World Bank and the African Development Bank has said.
It notes that reinforced regulation will improve investments in the sector and better achieve the financial inclusion of these services. These recommendations were part of a report titled eTransform Africa: The Transformational Use of Information and Communication Technologies in Africa.
Kenya and Senegal were used as the case studies on the role and impact of ICT innovations in financial services. "Mobile banking has reached a tipping point in Africa and now is the time for policy makers to act boldly," said the report released on Tuesday.
It continued, "Governments have a key role to play in encouraging investment and in enabling effective regulation, in consultation with central banks and the private sector, including commercial banks and mobile money service providers," it said.
Vital Wave Consulting, the firm that conducted the research, also recommends the development of cross border mobile banking services.
"Governments need to coordinate with the Regional Economic Communities in support of regional integration by introducing favorable regulations to allow mobile operators and other non-bank third parties to offer cross border mobile financial services," it observes.
Despite the huge success of some like M-Pesa, mobile money faces distinct developmental challenges. The report points at issues of trust, consumer protection, and network systemic risks that can slow the pace of progress saying this require clear and strong regulations.
Last week, the Information and communication PS, Bitange Ndemo said money transfer services will start being subjected to regular audits to protect consumers. He was speaking at a cyber security conference in Nairobi.
"The need for policy and regulatory development is made more difficult by the speed of technological change. Nevertheless, strategic intervention through policy or public investment can play a critical role in addressing the challenges," said World Bank.
The eTransform Africa report also looked at other sectors that ICT has been playing a major part, namely agriculture, climate change, education, health, modernising government and regional trade and integration.
"The Internet and mobile phones are transforming the development landscape in Africa, injecting new dynamism in key sectors. The challenge is to scale up these innovations and success stories for greater social and economic impacts across Africa over the next decade," said Jamal Saghir, World Bank Director for Sustainable Development in the Africa Region.