New cash transfer service eyes Rwanda’s 1.5m cellphone users

MTN will launch a mobile money transfer product in Rwanda before the end of this year.

This follows an extensive technological and legislative process supervised by the regulator, National Bank of Rwanda.

MTN Mobile Money will be the first of its kind in Rwanda. It will be available to the company’s one million-plus subscribers.

The announcement comes just days after the MTN operation in Kampala said it would spread the mobile money product to the region.

Officials in Rwanda said the product would also go international soon.

Both developments not only shift the competition to a regional level, but ushers the telecom companies into one of the most capitalised industries: international remittances.

In Rwanda, remittances from abroad in 2008 were recorded at $150 million, while in Uganda they were at $724 million, down from $786m in 2007 as a result of the global economic crisis.

Traditionally, Rwandans transfer money to friends, relatives and business associates through various means — financial institutions, the post office and third parties.

The money in circulation has also increased by 28 per cent in the same year, compared with 20 per cent in 2007, owing to high inflation.

The NBR deposits in banks also increased moderately by 6.4 per cent in 2008.

Though access to banking services, as demonstrated by an increase in bank accounts, increased dramatically in 2008 by 46.6 per cent, sceptics say MTN’s Mobile Money might not be quick to revolutionise cash transfers in Rwanda as envisaged.

Money transfers by mobile phones have been quite successful in other operations in East Africa.

MTN Uganda and Zain have moved over Rwf10 billion in mobile money transactions since they started the service.

This is just a small fraction of the global trade that the telecoms are now likely to tap into.

Zain recently announced a partnership with Western Union that will allow clients to send and receive money worldwide.