The financial inclusion revolution
It is a challenge for people in Sub-Saharan Africa to gain access to financial services. Almost half of the population in the region does not have a traditional bank account. At the same time, more than 90% of adults own a cell phone and one in three have made or received digital payments. Digital financial platforms have been proven to contribute to financial inclusion. They enable cashless peer-to-peer payments, remittances and simplify local money transfers or bill payments. Most importantly, they offer everyone access to financial products and services - regardless of whether they have a traditional bank account or not.
Financial Inclusion: the role of digital financial platforms
Sub-Saharan Africa is estimated to be the second largest and fastest growing mobile market in the world, and mobile money products and services have proven to be a powerful tool to promote financial inclusion. In 2020, there were 157 mobile payment services in Sub-Saharan Africa with an estimated 150 million active accounts and 1 million mobile money agents conducting cash and electronic money exchanges.
In Africa 45% of the population have no bank account.
"Digital financial platforms have been proven to contribute to financial inclusion and give people access to financial services regardless of whether they have a bank account."
Jaskirat Chadha, Head of FI Debt of responsAbility Investments AG
A disruptive solution for the African market
With this in mind, Wave Mobile Money was founded by two experienced fintech entrepreneurs who had successfully sold their previous company to an international payment service provider. They subsequently launched Wave in Senegal in 2017 and then in Côte d'Ivoire in 2019. With the mobile wallet technology, they wanted to "solve" the challenges of last-mile connectivity - such as delayed payment processing, high costs and a lack of access options.
More competition for innovation and lower prices for people
Essentially, Wave is a fintech company that has set itself the goal of giving everyone in Africa access to digital financial services. The company provides its users with a digital platform where they can deposit and withdraw money, send money, pay bills or buy mobile credit and data. Wave's business model is to provide customers
with an interface that is easy to use, reliable and faster than competing platforms, while ensuring transparent and affordable pricing structures: On average, most transactions incur a 1% fee. This model has proven to be so disruptive that the large traditional mobile money providers in Senegal and Ivory Coast - mostly telecommunications giants - have had to lower their prices to compete with Wave. This has a positive impact on the industry, as mobile money users benefit from lower prices, which facilitates the use and spread of mobile payment services.
A successful example of financial inclusion in Africa
As of 2023, Wave has total assets of over USD 500 million and processes more than USD 2 billion in mobile payment transactions every month. In Senegal, the company's most important market, it is estimated that more than three quarters of adults currently have the Wave app on their smartphone, while only half have a bank account. This makes this company an excellent example of how fintech - even without lending - can be a key driver of financial inclusion in emerging markets, with a positive impact on the local population.
