Consumers are gradually ditching their financial institution accounts and shifting to mobile money due to the ubiquity and expanded utility of cellphone-based cash services, an analysis of these surveys reveals.
East African adults living in the poorest 40 per cent of households are more than twice as likely to have a dormant bank account compared with adults living in the richest 60 per cent of households, says the World Bank report.
The revelation that a quarter of East Africa’s bank accounts lie idle pours cold water on recent recruitment drives by financial institutions to sign up customers with promises of zero tariff accounts.
Consumers are gradually ditching their financial institution accounts and shifting to mobile money due to the ubiquity and expanded utility of cellphone-based cash services. The revelation that a quarter of East Africa’s bank accounts lie idle pours cold water on recent recruitment drives by financial institutions to sign up customers with promises of zero tariff accounts. Experts say the rush to enrol new customers without offering financial literacy on the range of services offered resulted in the dormant accounts, as consumers — especially low-income and rural dwellers — find banking services expensive, opaque and inaccessible.
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