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Social affairs 03 Sep 2015

Electronic money is being used more in developing countries

According to the Global Findex (2014) report, only 15% of adults worldwide use electronic money, and a lot of them live in developing countries.

Low-income countries account for 70% of total mobile accounts in the world (15%). It is an illuminating piece of data, which displays a map showing who opts for this type of electronic money, according to data from Global Findex (2014).

Sub-Saharan Africa is the geographical area in which the use of electronic money is most widespread, and represents almost 80% of the existing electronic money accounts.In second place, and trailing quite far behind, is Latin America and the Caribbean, with 12%.

But what characterizes them and conditions the use of this kind of money?

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1. Electronic money, which became operational in Kenya and spread throughout the region from there, operated in an uncharted regulatory territory. Was the issuer a financial institution or a telecommunications company? Although Safaricom operated as a telecommunications company, a mutual relationship with financial regulators immediately ensued, which served as a prototype for other countries in the region.

2. The lack of a broad financial sector to meet demand for financial services.

3. The heavy reliance on domestic and foreign remittances from the region may also have been a good reason for electronic money to succeed

Besides these geographical differences, gender inequalities also emerge in this report. More men have a mobile account than women:17% vs. 12% respectively.

Another of the gaps is in education. Level of studies as well as income does make a difference: people who have completed secondary education or higher studies have double the amount of mobile accounts (20%) than those with primary education or below that level (10%).

Referring to income, 18% of the richest people have a mobile account, compared with 10% of the poorest people

However, age does not seem to be an obstacle as there are not many differences among users who are mature adults compared to younger adults

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