Senegal

Senegal

The ecosystem for digital financial services (DFS) in Senegal is transitioning from Start-Up to Expansion, a phase characterized by a predominance of first-generation DFS (e.g., money transfers, e-top-ups, bill payments) offered on a competitive basis by multiple providers. Three complementary models coexist: (i) OTC leads the market with money transfer companies (W@ri, Joni Joni); (ii) e-money is a distant second, mostly dominated by mobile money (Orange money, Tigo Cash), and: (iii) agent banking offered by one bank (Sociétés Générale de Banques au Sénégal SGBS via subsidiary Manko) and one microfinance institution (Microcred). While the market is dynamic and features a large and growing number of non-exclusive agents, it has limited interoperability and limited services. Over-the-counter (OTC) transfers and bill payments through agents dominate the market.

BCEAO (Banque Centrale des Etats de l’Afrique de l’Ouest) issued new and better regulatory instructions for e-money issuers in May 2015 that address some of the gaps in the 2006 instructions. However, there are still opportunities for improvement, particularly in regards to know-your-customer, interoperability, agent banking, customer protection, market conduct, and supervision.


Where We Are

  • Dominance of OTC transfers and bill payments challenging active usage of e-wallets
  • OTC agents not allowed to do deposit collection, credit disbursements or reimbursements
  • Emergence of agent banking models in the market
     

What We Did So Far

  • Provided a training on agent network on digital finance facilitated by the Helix Institute (MNO, Money Transfer Companies, MFIs, Technological providers)
  • Facilitated a training on payment diagnostic methodology
  • Provided a workshop on strategy in digital finance involving main market stakeholders (MNO, Money Transfer Companies, MFIs, Technological providers)
  • Facilitated a workshop on Microfinance Institutions and Digital Finance
  • Facilitated the participation of representatives of the Central Bank and the Ministry of Finance in a G2P exposure visit on digitizing social benefits payments in South-Africa
  • Invited BCEAO headquarter staff to a conference in Australia organised by the University of New South Wales UNSW on regulatory innovations in DFS
  • Conducted quantitative research on client adoption of DFS with Intermedia
  • Carried out an Agent Network Assessment with Microsave
  • Initiated a Financial Services access point mapping with the MIX market
  • Analysed the needs of the Microfinance sector with PHB Development
  • Signed a technical assistance agreement with one market provider for a pilot project on secondary generation of digital financial services.
  • Officially launched the Digital Finance Services Working Group in partnership with the Ministry of Finance
  • Actively involved in the CGAP expert committee on Mobile Banking set-up for the central bank (BCEAO).

What We Plan for 2019

  • 30% active registered DFS users as percentage of adult population (total 2,552,100)
  • Provide a second training session on agent network management facilitated by the Helix Institute in July 2016
  • Organize “Microfinance & Digital Finance” workshop on the different DFS business model options for Microfinance  institutions in Senegal
  • Conduct the payment flow diagnostic and recommend a roadmap to shift payments from cash to digital
  • Disseminate the results of the quantitative and qualitative researches on customer adoption
  • Disseminate the MicroSave Agent Network Assessment survey results
  • Conduct in collaboration with DFS providers Human Center Design approach to client
  • Improve Financial Service Access point Map of providers with the MIX Market
  • Provide technical assistance for G2P pension payment pilot: the Government of Senegal has requested MM4P support / technical assistance to shift the payment of 30 000 retired civil servants’ pensions from cash to digital (Project description conception, ongoing between the Government and MM4P)
  • Provide technical assistance / grants to service providers (MNO, MTO, MFI, Bank, Post Office) to develop innovative products and services and to improve agent networks
  • Organise Digital Financial Service Working Group meetings at the national level in Senegal to provide a forum for stakeholders to share, learn and grow the digital finance ecosystem

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