Since the launch of the first mobile money service in Senegal in 2010, the market for digital financial services (DFS) there has boomed. In 2015, only 6 percent of the population was considered an active user of these services. By 2017, that figure had jumped to 21 percent. But who uses DFS in Senegal? What prompts them to—or prevents them from—using these services? What impact do DFS have on their lives, their financial security and their well-being? These are the major questions on the minds of DFS providers. The UN Capital Development Fund programme MM4P commissioned the consulting firm MicroSave to conduct a study in three of the country’s big cities—Dakar, Saint-Louis and Ziguinchor—to answer these questions.

In the region of Dakar, which has the most DFS access points, MicroSave came across customers from all walks of life who were enthusiastic about the benefits of these services. One such customer was Elhadj Sow, whose story is particularly interesting, as he gradually switched from over-the-counter financial services to DFS before becoming a distributor for several service providers.

Elhadj’s financial journey had its roots in his childhood, which is when his financial education began. At five years old, Elhadj was sent to study at a Qur’anic school in the region of Fouta. He saved the money he earned from begging in a cloth bag—known as a nafa—and, once full, buried it to keep it safe. Three years later, his financial education continued in Dakar while he watched his mother manage a series of tontines. Elhadj became accustomed to wrapping his pocket money in a dirty cloth (to reduce the risk of theft) and hiding it under his clothes. As he grew older, he started putting his money a wooden piggy bank—called a condaané—and, after saving a certain amount, deposited it in a savings account with a financial institution.

His first experience with digital payment services came when he received money from his sister, who lived in France, in order to pay his school fees. Later, he heard a radio advertisement for Wari over-the-counter services and, resolving to try them for himself, sent part of his student bursary to his grandmother who lived inland. His first experience with over-the-counter services as an issuer was a resounding success. But it was not until 2010, when his possessions were stolen on a pilgrimage to Touba, that he was fully convinced of the merits of these services.

In 2013, Elhadj got a job with a mobile telephone operator. It was then he discovered, and started using, mobile money services. But with little money to his name, his electronic wallet remained largely unused. When his contract came to an end in late 2013, he decided to start his own business and opened an Internet café. Elhadj began using his mobile money account more regularly, storing the daily earnings of his business in his electronic wallet. Sadly, his business venture failed and the business went bankrupt. Yet, the experience did little to quell his enterprising spirit, and in 2016, he launched a new business offering money transfer and mobile money services on behalf of mobile operators.

These days, Elhadj uses DFS to manage his personal finances and to run his business.

So what does Elhadj’s experience with DFS tell us? It provides some insights into what factors drive DFS uptake and usage, such as the following:

- Familiarity is not the main reason why people take up and use a product. Elhadj began using his electronic wallet more frequently because he felt that his income was growing and because he had launched his own business.

- It takes time for people to trust products like these, and people who already use formal financial services and over-the-counter services seem more likely to develop that trust.

Such lessons can help DFS providers come up with meaningful value propositions that are likely to increase service uptake.

Although the study is still in progress, with the final results expected in early 2019, the interim findings provide intriguing insights regarding the impact of DFS. Expect more on this subject very soon!