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Digital financial services use up

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Use of digital financial services in the country went up in 2021, a situation Information Communication and Technology (ICT) experts have rated as an ideal step towards digitising the economy.

Figures released on Friday by the Reserve Bank of Malawi (RBM) show that volume and value of digital financial services transactions went up by 62.8 percent and 39.9 percent, respectively, to 765.4 million and K9.7 trillion during the year ended December 31 2021.

In its National Payment Systems Report, the central bank, however, notes that although retail transactions contribute 99.1 percent of the overall volume of transactions, they account for just 9.6 percent of the total value of transactions processed.

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According to the report, total number of registered mobile money subscribers rose by 40.6 percent to 10.1 million and the number of registered mobile money agents rose by 93.2 percent to 155,816 in the period under review.

“Despite the increase in the number of active users, their proportion to the total number of subscribers (activity rate) dropped from 61.4 percent in 2020 to 56.5 percent as at December, 2021.

“The drop could partly be attributed to a number of customers that were registered on mobile money platforms as beneficiaries of Covid relief assistance by government and donor agencies and most of these users have since become inactive after the projects came to an end,” the report reads.

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Commenting on the report, ICT Association of Malawi (Ictam) President Bram Fudzulani said the subdued value of transactions might heavily be attributed to high transaction fees and lack of digital literacy.

He said Malawians have been complaining about the data prices and that telecommunication companies finally listened and the country will begin to see internet penetration numbers going up.

“Similarly, the service providers need to listen to the voice of the people by reducing the transaction costs, work on their agency network and RBM needs to level the playing field by opening up the payment industry to allow more players that can bring about competition, which will automatically drive prices down,” he said.

As technology evolves, countries are moving towards digital payment systems, which are touted as safer and convenient.

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