The year 2017 was particularly active for digital finance services (DFS) in Senegal. DFS providers redoubled their efforts to attract new customers. New offers entered the market, in particular Ecobank Mobile and YUP, launched by major banking groups. Over-the-counter operators, dynamic as usual, increasingly turned out digital solutions that provide customers with handy services.

The Government of Senegal was active as well, reviving a national strategy for financial inclusion that is in line with the regional strategy on financial inclusion of the West African Economic and Monetary Union, which was adopted by Member States in June 2016.

The year was also marked by meetings between financial players, promoting exchanges and partnership ideas to develop new DFS models.

The UNCDF MM4P programme was not outdone, bringing together actors from all categories in a DFS working group that discussed unifying themes like financial education for all, possible partnership types in the DFS ecosystem, and agency banking regulation.

All of these interesting developments foreshadow promising prospects for 2018.

Yet, the development of new DFS offers is not enough to achieve financial inclusion; these offers should be tailored to the needs of the people usually excluded from the financial system.

It is clear that rural populations, women, youth and people with low levels of education do not have sufficient access to financial services in Senegal. The most recent Survey of the Financial Inclusion Situation (Enquête sur la Situation de référence de l'inclusion financière) confirms that these segments are underrepresented in the financial system. For example, 31 percent of urban residents have an account at a financial institution, compared to only 10 percent of rural residents.¹

Access is not the only thing to vary between urban and rural residents—the specific need that DFS might meet can also differ. Consider a farmer from the rural village of Dagan Birame:²a farmer there does not necessarily need to pay electricity bills or pay school fees at a Senegalese university; the farmer might be more interested in a service that responds to his/her daily life and environment, such as credit or digital savings to develop his/her business.

People with limited education should not feel excluded from DFS offers. An interesting experiment conducted in India by the firm MicroSave showed that the illiterate can be active users of a mobile wallet if a special method of reasoning and calculation is integrated into it. To this end, the firm developed MoWO, which stands for Mobile Wallets for the Oral Segment, as an interface that allows illiterate people to use an e-money account through the use of images and icons (see photo).

MoWo interface used in India. Credit : MicroSave

The adoption rate of smartphones in Senegal is quite high³,including in rural areas where it is now common to see people, unable to read or write, use a smartphone to communicate. However, infrastructural and structural constraints (e.g., instability of the mobile network, lack of electricity, high cost of a smartphone, lack of a 3G network, high cost of a 3G connection) can militate against the prioritization of rural people and the strong aspiration of people to join modernity by owning a phone (or smartphone) and using it in an integrated way in their everyday life in the village.

It is certainly encouraging to see the evolution of the Senegalese DFS market. But, it is time to change the paradigm of deploying services that benefit the educated, urban and male populace. This shift would not only increase financial inclusion but also support a mass market. And even if it seems costly to reach those currently excluded, there are solutions developed elsewhere in the world that have achieved positive results and which providers could adapt to the Senegalese context.

DFS has the potential to accelerate financial inclusion. This acceleration will be all the more quick when players bring dedicated offers to market that are adapted to the populations most neglected by conventional finance.

-----

^{1.Ministère de l'Economie, des Finances et du Plan, Direction de la Réglementation et de la Supervision des Systèmes Financiers Décentralisés, Rapport Enquête sur la Situation de Référence de l’Inclusion Financière au Sénégal (ESRIF) 2017 (Dakar, 2018).↩}

^{2. Dagan Birame has no electricity or DFS access.↩}

^{3.Smartphone usage in Senegal overall is 82 percent, according to Mediametrie.↩}