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Four Major Challenges Faced by Mobile Money Users in Senegal

As access to digital finance grows, so do the risks. A concrete action plan involving all stakeholders is needed to address them.
Hands working on a calculator with a mobile phone next to it on top of a notebook.

Digital financial services (DFS), in particular mobile money services, are driving the growth of financial inclusion in Senegal. According to Global Findex 2021, only 28 percent of adults have an account with a financial institution, but 45 percent of adults have a mobile money account, compared with 6 percent in 2014.

While DFS offer many opportunities for Senegalese users, the national survey on the risks associated with the use of DFS, conducted by CGAP in collaboration with the Financial Services Quality Observatory (OQSF, for its initials in French) and Innovation for Poverty Action (IPA), reveals significant challenges. 90 percent of DFS users have been exposed to at least one risk in the last 12 months, and 32 percent have lost money due to a risk they faced. In addition, 39 percent have faced difficulties in using DFS due to lack of digital and financial literacy.

Chart showing the types of challenges faced by DFS users in Senegal

Source: CGAP, National survey on consumers DFS risks in Senegal, 2022

DFS users in Senegal are very active, with 98 percent having used at least one service per month over the past 12 months, and the vast majority using two mobile money accounts. However, this usage is mainly focused on basic services such as cash-in/cash-out, receiving funds, account-to-account transfers and buying airtime. The digital credit and savings offer is very recent in Senegal, and still not widely adopted.

Four major challenges faced by Senegalese mobile money users

The active use of digital finance comes with exposure to significant risks that require the attention of stakeholders in the DFS ecosystem in Senegal 

  1. Insufficient transparency: 55 percent of DFS users surveyed stated that they were not always informed of the cost of the service before completing a transaction. While service providers do display the cost of the transaction before it is validated, the fact that a majority of users do not notice it raises questions about the accessibility of this information for users with lower education levels. 45 percent of users have a primary school level of education and 21 percent have received no formal education.
  2. Significant exposure to attempted fraud and scams: 43 percent of users have had to deal with at least one attempted fraud or scam in the last 12 months, resulting in the loss of money for 18 percent of them (8 percent of all users). Despite the scale of this risk, mobile money agents, who are often the local point of contact for users, advise only 18 percent of users about this risk (as a comparison, 60 percent of users in Côte d'Ivoire receive fraud warnings from agents).
  3. Poor network or internet connection quality, making transactions difficult: 44 percent of users have experienced this difficulty at least once in the last 12 months, exposing them to the risk of losing money because of a transaction going awry. One user in five has lost money in the process.
  4. Inadequate redress mechanisms: Only half of those who have encountered at least one challenge when using DFS have contacted an agent or the provider to try to resolve the problem encountered. This figure includes users who have lost money, often as a result of a scam or fraud. Lack of information on how to contact DFS providers is the biggest obstacle to reaching the complaints channels available for users, indicating insufficient and/or inadequate communication from providers about their customer redress mechanisms.

Chart showing percentages of users exposed to different risks in Senegal

Source: CGAP, National survey on consumers DFS risks in Senegal, 2022.

In addition, 39 percent of DFS users lack the digital skills needed, leading to difficulties navigating the menu, and input errors for transaction recipients’ phone numbers. Providers need to pay attention to designing customer journeys for all user profiles, especially the most vulnerable, and prioritize making information accessible via a diversity of channels and messages that can be understood by all. 

The way forward for preventing and mitigating these risks

During the presentation of the survey results to DFS ecosystem actors in Senegal, we identified a number of preliminary actions to reduce these risks. For example, better communication through local languages and diverse channels, notably via local radio, associations or leaders, would make it possible to account for the diversity of user profiles and improve transparency and the ability to use services.

Capacity-building should also focus on agents, so that they can play a better role in educating customers about digital finance and its risks.

To combat fraud and scams effectively, DFS providers need to work closely together, exchanging information and running joint customer awareness campaigns. To achieve this, existing frameworks for collaboration between ecosystem actors should be strengthened, and DFS consumer protection issues given greater consideration.

These are just some of the issues that key actors in the ecosystem need to continue discussing, so that together they can build a concrete action plan to prevent and mitigate the risks for mobile money customers in Senegal.

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