Annenberg-Oxford Media Policy Summer Institute edition:14 location:University of Oxford date:June 18 - June 29, 2012
Principal research question: What are the effective legislative and regulatory responses to mobile banking services in the East African Community (EAC)?
Keywords: Convergence, legislation, regulation, Mobile banking services, East African Community.
Hypothesis: There is a lack of effective and robust legislative and regulatory framework in the EAC that addresses the mobile banking services.
Purpose – This paper addresses issues affecting mobile money in the East African Community (EAC), where cell phones transfer more than half a billion dollars monthly. The number of mobile phone users has long exceeded the number of people with bank accounts across the EAC. The purpose is therefore to demonstrate the need for the EAC to address issues relating to telecommunications and financial regulation to ensure that mobile money services bring the desired broad benefits, especially to the poor in the EAC.
Design/methodology/approach – The paper provides an overview of the current mobile money landscape in East Africa in addition to describing the status of the regulatory framework in each of the five EAC countries. It therefore entails analysis of EAC Member State national laws, regulations, bills and policy papers relating to telecommunication in order to establish how they address a range of challenges and issues brought about by the introduction of mobile money services.
Findings – East African banks are mostly situated in urban centres and most people are closed out of banking services. Mobile transfer has become so popular in the EAC since the introduction of the Mpesa mobile money in 2007. The platform now has more than 15 million monthly active users. More than half a billion dollars are transferred in the region using cell phones each month through the largest of a number of commercial services on offer. The practice is burgeoning in EAC since traditional banks and banking activities are in short supply, and most people lack access to financial services taken for granted in industrialized countries.
There is a lack of effective and robust legislative and regulatory framework in the EAC that addresses the mobile banking services. To ensure that mobile money services bring the desired broad benefits, governments in the EAC need to address issues relating to telecommunications and financial regulation.
The paper urges for coordination and cooperation across sectors such as telecommunications, banking and electronic commerce. It also puts in consideration issues of regulatory collaboration and interoperability.
The paper recommends for harmonization, collaboration and interoperability of the ICT sector and the financial sector at EAC level in regulating mobile money so that intraregional use of the technology can be expanded - a step that could boost regional economic growth.
Paper type - Research paper