Granting Access: Leveraging Social Payments to Expand Digital Financial Inclusion in Cote d’Ivoire captures the experience of piloting digital social grant payments in Cote d’Ivoire and concludes that merely paying social benefits into a digital account is not sufficient to lead to lasting financial inclusion, but that coupled with additional activities such as financial literacy campaigns and expanded agent networks it can have a positive impact on expanding adoption of digital financial services the poorest.
Côte d’Ivoire is the largest Digital Financial Services market in the West African Economic and Monetary Union. In 2014, Côte d’Ivoire accounted for over 50 percent of the value deposited into mobile money accounts in the region. However, in common with many markets across the globe, Côte d’Ivoire has a high level of inactive DFS accounts that have not been used for over 90 days. While there are wide differences between providers, data indicates that even under the best case scenario almost 50 percent of the total number of registered DFS clients are inactive. In order to sharpen the DFS business case and to further financial inclusion, it is important to understand why the services on offer are not being widely used by registered customers. Is it a matter of pricing? Could it be product design? Does it have to do with concerns around security? Or is it an issue of customer care?
To investigate the causes of inactivity and learn how they can be addressed, The Partnership for Financial Inclusion, a joint initiative of IFC and The MasterCard Foundation to advance mobile financial services in Sub-Saharan Africa, carried out market research in cooperation with two of the largest DFS providers in Côte d’Ivoire. The study found three main barriers to usage:
- Not a relevant service: nearly half of the customers interviewed have irregular incomes and therefore do not need to use their mobile money accounts on a consistent or regular basis.
- Lack of understanding of the benefits of the service/ product: over one quarter of customers are unaware of any compelling reason to use a mobile money account instead of using cash or more traditional forms of financial services.
- Too expensive: over 15 percent of customers cite cost as a reason for not using mobile money accounts instead of cash. Mobile money tariffs are much higher in Côte d’Ivoire than other African countries, and this certainly seems to be restricting usage.
Some secondary reasons were also raised by up to 10 percent of the research respondents, such as a lack of conveniently located agents, difficulty using the services, and lost PIN codes. In addition, the high incidence of “direct deposits” (into a recipient’s mobile money account) means that available data undercounts customers who use the service to send money.
A number of recommendations can be drawn from the research in order to improve activity levels. Firstly, the cost of DFS transactions should be reviewed and reduced. This had strong support from inactive customers. Secondly, the services and products of DFS providers should be made more relevant for customers, for example by offering access to savings and loans. There is also a strong demand for a better distribution of agents across the country to service more locations, particularly in rural areas. Finally, there is a need to help customers understand the benefits of the services and how to use them with confidence.