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Mobile money services can reduce pollution in Africa, study says

Services eliminate need to travel long distances to rural banks, cutting down on pollution

In the wake of an explosion in mobile money transfer services in Africa, a new report has revealed that the financial services have the potential to reduce the effects of climate change.

The report, entitled SMARTer2020, conducted by the Boston Consulting Group (BCG), showed that mobile services innovation can contribute to cutting global greenhouse gas emissions by 16.5 percent.

Citing Kenya, Africa's second largest telecom market as an example, the report said the country has 6.5 million subscribers who carry out 10 million banking transactions per day, with an average value of $20. The calculated environmental impact of each transaction is much lower than it would be if the mobile user had traveled to a bank. Based on such calculations, the report said mobile money services could yield 3.55 metric tons in carbon dioxide emissions reductions in Africa alone.

Mobile providers are playing an active role in fostering adoption of mobile money contribute emission reduction, said Mwambu Wanendeya, Ericsson's vice president and head of communications for the company in Africa.

The BCG report indicates that the large amounts of emissions are generated as a result of travel to access banking services in Africa. Except for urban areas, most rural locations in Africa have few banks. People often are required to travel for hours to access brick-and-mortar banks.

"That is why the Zambian government came with carbon tax levied on every vehicle on the road to help it put in place certain mechanisms aimed at mitigating the impact of climate change as a result of gas emission from moving vehicles," noted Timothy Chirwa, the chairperson of the Taskforce of Climate Change in Zambia. Chirwa said it would be hard to dispute the findings of the BCG report.


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