Rural dwellers continue to be sidelined in the financial inclusion initiative as mobile money agents continue shunning rural areas due to low volumes and consequently, reduced turn-over.

According to published Reserve Bank of Malawi (RBM) data, relative to 2021, the agent network for mobile money agents grew by 56.5 percent to 243 857 in December 2022, a reflection of an increase in access points for financial services across the country.

Mobile money has plays a key role in poverty alleviation

However, despite the increase in the number of agents, their geographical distribution remains a challenge as most of them are located in urban and semi-urban areas secluding the highly populated rural areas.

For instance, out of the total number of agents, only 55 601 (22.8 percent) are geographically located in rural areas, and the rest are in urban and semi-urban areas.

Furthermore, only 57.0 percent of agents based in rural areas were active over a 90-day period, in contrast to 81.2 percent (152,823) of those domiciled in urban and semi-urban areas.

Said RBM in its 2022 National Payments System Report: “It is also worthwhile to note that most agents seem to shun operating in rural areas, perhaps due to, among others, low volumes of transactions which may not make business sense for them.

“Therefore, stakeholders must continue working together to find lasting solutions that would incentivise agents to operate in rural areas and ensure they remain active.”

Notwithstanding the strides made in the volume and value of mobile money transactions, transactions on mobile money platforms are dominated by cash in/cash out, business to business, airtime top-ups and person to person transfers.

“More effort is needed to sensitise the public to embrace mobile money for payment of goods and services,” RBM added in the report.

One of the mobile money agents based in Lirangwe, Blantyre, Esmie John, said in recent months, mobile money transactions have mostly been in form of cash out, which also affects her turn-over.

“We have most people coming to cash out, very few would do cash-ins. As a result, the volumes are low and hence, my low commissions,” she said.

Consumers Association of Malawi executive director John Kapito emphasised the need to introduce incentives for those willing to operate in the rural areas.

“Most of the agents in rural areas do not have cash to give to clients while at the same time, most of the clients in rural areas are basically recipients of cash other than senders,” said Kapito.

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