Senegal, with its rapidly growing digital infrastructure, is seeing a transformative shift in how payments are made. The emergence of new payment methods, especially mobile payments and neobanks, is revolutionising the financial sector, enhancing accessibility and offering a more inclusive financial ecosystem. In this blog post, we will examine how these new payment solutions are impacting Senegal’s economy and society.
The State of Banking in Senegal
Senegal’s banking sector is fairly developed, with a mix of both local and international banks. Key players in the Senegalese banking sector include Société Générale Sénégal, Banque Atlantique Sénégal, and Ecobank. However, despite this, a significant portion of the population remains unbanked, especially in rural areas. According to a 2020 report from the World Bank, over 40% of Senegalese adults do not have access to formal banking services, which creates a gap that mobile payments and neobanks are starting to fill.
Mobile Payments: A Transformative Force
Mobile payments are leading the charge in Senegal’s financial transformation. Services like Orange Money and Wari have become household names, offering millions of Senegalese the ability to transfer money, pay bills, and purchase goods and services through their mobile phones. Orange Money, for instance, serves over 8 million users in Senegal, with around 25% of the population relying on this service for everyday transactions.
This shift towards mobile payments has brought financial services to previously underserved regions, giving people in remote areas access to banking and payment solutions without the need for a physical bank branch.
The Rise of Neobanks in Senegal
Neobanks, digital-only banking platforms that operate without physical branches, are beginning to make their presence felt in Senegal. Manko, launched in 2020, is one such neobank offering a wide range of services from savings accounts to digital loans and cross-border transfers, all through its app. Neobanks are especially popular among Senegal’s younger, tech-savvy population, who appreciate the ease of managing their finances through mobile devices.
While neobanks are still in their early stages in Senegal, they are poised for growth. By offering lower fees, higher interest rates on savings, and more flexibility compared to traditional banks, they are attracting a growing number of users.
The Future of Payment Methods in Senegal
With the rise of mobile payments and neobanks, Senegal’s financial landscape is becoming increasingly digital. Over the next few years, more Senegalese are expected to shift from traditional banking to these new payment solutions. The government has also been investing in improving digital infrastructure, which is likely to further drive the adoption of mobile payments and neobanks.
In the future, Senegal could see an even more inclusive financial system, with neobanks and mobile money platforms providing banking services to the previously unbanked, particularly in rural areas.