Mobile Money for Increased Financial Inclusion in Burundi

Despite the importance of financial inclusion for economic growth and poverty reduction, the formal banking system rarely reaches the rural areas, and when it does, the cost of their services becomes a barrier for low income households and small businesses. The proportion of adult population that owned an account at a financial institution in Burundi was 12.5% in 2016. This is very low com-pared to the sub-Saharan African average of 34%. In addition, a national financial inclusion survey in Burundi in 2016 indicated that the ratio of account holders was five times higher in urban areas than in rural areas. Moreover, the survey indicated some gender and demographic differences in account ownership. The proportion of men owning an account was found to be almost double the women, while the proportion of young people (aged 18-29 years) owning an account was half of those aged 30 years and older. The ratio of account holders was found to vary depending on socioeconomic category; it was found to be 89.5% among state employees, 52.1% for private sector employees, 30.1% for traders and 5.3% for farmers. Contrary to what is observed in many other developing countries, women were found to constitute only 28.3% of microfinance institutions customers. It should be noted that the lack of access to formal financial services means that the poor and small businesses are limited in their ability to save, repay debts, and manage risk responsibly. Its therefore imperative to find innovative models that help extend financial services to the financially excluded and the poor. Its for this reason that digital financial services started in developing countries through mobile phones, in a bid to try bridging the financial inclusion gap. Mobile money technology has been introduced in Burundi as well, but the adoption and use are still low compared to other countries in the region.