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Digital financial services volume, value up in second quarter

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Both volume and value of Digital Financial Services (DFS) went up in the second quarter of 2020 figures contained in the Reserve Bank of Malawi (RBM)’s National Payment System (NPS) second quarter report show.

The report issued on Wednesday shows that relative to the first quarter of 2020, the overall performance of retail DFS transactions improved in terms of volume and value of transactions processed during the period under review, which rose by 11.4 percent and 3.9 percent to 100.2 million and K1.5 trillion, respectively.

Total number of registered customers for non-bank mobile money services remained largely unchanged at 7.2 million in the period under review with 61.3 percent being male while the remainder for female.

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The report further reveals that the number of registered mobile money agents increased by 22.5 percent to a total of 69,055 but there was low activity rate for mobile money agents.

According to the proportion of agents who were available to serve customers during the past 90- day period declined to 61.0 percent from 67.8 percent.

Athough the mobile money services have made such favorable progress, internet banking has largely been on the downward spiral.

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The total number of subscribers for internet banking services declined by 4.2 percent to 204,394 during the period under review and the value declined by 3.3 percent to K779.6 billion with volume slightly increasing by just 1.3 percent to 591,217.

While on mobile banking, the number of subscribers increased by 5.6 percent to 956,038 but volume of transactions declined by 9.2 percent to 7.7 million.

Despite the decrease in the number of transactions, the corresponding value of transactions rose by 22.5 percent to K153.3 billion.

RBM is attributing the mixed performance to the agricultural harvesting season which increased the economic performance and the Covid-19 pandemic negative effects on the economy.

“The onset of the agricultural trading season, which stimulates economic activity and the Covid-19 pandemic experienced during the quarter has had a mixed influence on the level of transactions processed with some channels registering an increase in usage while others have experienced a reduction,” reads the report in part.

The central bank has further called for continued implementation of appropriate policy interventions by both the Reserve Bank and payment systems operators to ensure that the majority of the population increasingly uses digital financial services.

Speaking in an interview, a Chancellor College based economist Exley Silumbu said the figures on new subscribers are mostly good but the pace is not encouraging.

“Financial institutions should fight hard to penetrate the rural masses where there is untapped market but at the same time, gadgets for carrying out those transactions are expensive and fees for digital transactions are expensive beyond the reach of the rural masses,” Silumbu said.  

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