Ubiquitous Technology, Untapped Benefits: Is mobile money technology destined for oblivion in Ghana?

April 2, 2012

This blog post was written by Dr. Edwin “Cliff” Mensah of the University of North Carolina at Pembroke who recently presented at the Emerging Payment Systems Seminar #6, "Barriers to Mobile Money Transfer Uptake in Ghana."

Our study explores the adoption of mobile money (MM) by Ghana’s urban poor one year post its introduction to the Ghanaian consumer market. With the use of semi-structured interviews, we investigated the cultural perceptions in Ghana of the newly introduced financial tool, identified its successes as well as barriers to its adoption and ultimately, verified its impact on Ghana’s urban poor with respect to their access to financial resources, attitude toward saving, storage and wealth transfer.

Estimates from the African Development Fund (ADF) show that formal financial institutions in Ghana reach only about 5% of the populace, and poor people’s access to financial services is equally low in Ghana, estimated at about 8%. This imposes a heavy constraint on the financial activities of the poor and serves as a limiting factor in the quest for poverty alleviation. The advent of MM technology, however, was quite reassuring since it had the potential to create an avenue to bridge the poverty gap by engendering a system that would allow money to be transferred easily and cheaply in the informal sector.

This study, therefore, examines the following research questions:

  • Has the availability of MM increased or improved access to financial services to the urban poor?
  • Is MM perceived as “good money,” and if so, what is its impact on the attitude toward saving, storage and wealth transfer in a primarily cash-based economy?

Our findings thus far, show a very marginal uptake of this supposedly essential financial tool. We encountered a high percentage of inactive customers (over 95%) who had never conducted a single transaction via MM. Furthermore, despite the extensive advertisements in the media outlets, there was an acute lack of knowledge and awareness of the product. In fact, while the poor were completely unaware of MM, the non-poor had very little knowledge or understanding of MM. An overwhelming proportion of our interviewees indicated their desire and willingness to adopt MM if it were secure, easy and convenient to use. These limitations, among other factors akin to constructs in Davis’s (1989) paper, were uncovered as barriers to the adoption of MM. In summary, trust, technological anxiety due to the lack of knowledge, perceived risk associated with the product, perceived usefulness, ability to use the product, attitude/opinion about the new product, and most importantly for vendors and market women, access to agents of MM products were all cited as reasons for non-adoption.