Mobile Banking in Africa

Mobile Banking in Africa

In class, we have discussed a phenomena that is common in development called ” The Leapfrogging Effect.”  The Leapfrogging Effect, when discussed with ICT4D, is what happens when a developing country skips over an entire generation of a specific type of technology, and jumps straight into a very new, modern kind.  For example, in Africa, there is often a prevalance of mobile phone users, however, landlines are often very rare.  This is attributed to the leapfrogging effect, and that once the countries in Africa had the means to implement the phone technologies, it did not make sense for them to waste their money installing infrastricutre for their outdated landline phones, but rather jumped straight ahead to invest in mobile phone technology, leading a large portion of people in Africa to have never had a landline, but to have cell phones now.

This article by The Economist does not directly discuss the leapfrogging effect, but indirectly proves it.  It discusses how African nations are often way ahead of developed countries in the use of mobile banking.  Although not explicitly stated, one hypothesis for this is that possibly the rise of large and modern banks in African countries never developed as they did in the developed world.  However, now as they begin to get their foot in the door of banking, they will leapfrog ahead straight to mobile banking, rather than invest their money in a more archaic type of banking.


5 responses to “Mobile Banking in Africa

  • Miranda

    It’s so funny that we always think of Africa and mobile technology there as so far behind us development wise. Mobile banking will have a profound effect in African countries. The leapfrog affect always surprises me.

  • lfairba

    This is a very interesting phenomenon that I feel like a lot of people do not know happens. I wonder what the implications of leapfrogging are and if in between technologies could be more helpful to developing communities.

  • TIM0603

    I personally like mobile banking a lot and I think leapfrog phenomenon in this area is kinda reasonable even though I don’t quite agree on the technological infrastructure with the lack of landline in communication coz from my perspective, wired information connection is more reliable when wireless communication falls due to more variables.

  • gwendroff

    i think that the idea of instituting mobile banking in developing countries is a great example of the leapfrogging effect. Not only does it does eliminate time wasted traveling to banks, it also reduces money transfer costs that are a burden on people with relatively low per capita income.

  • ahamilton92

    I think the mobile banking phenomenon raises some important questions. It will be interesting to see what implications mobile banking will have for fraud. Would there be extra charges for mobile banking that will exclude some users? Will this only further marginalize those in Africa without mobile phones?

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