Do Mobile Money Service an effective instrument to further growth of the Small and Medium-Size Enterprises (SMEs)?
May 25

Do Mobile Money Service an effective instrument to further growth of the Small and Medium-Size Enterprises (SMEs)?

Somalia is among the countries in the sub-Sahara which have a high penetration of mobile phones. About (73%) of the population above the age of 16 use mobile services. About (63%) of mobile subscribers use mobile phones to save money and transfer it. Hormuud telecom dominates the mobile money services in south and central Somalia. Hormuud offers EVC-Plus services which continue to be a widely accepted means of payment and to store money. Somalis positively perceive mobile money services and the satisfaction rate is about 92% (World Bank, 2017). EVC-Plus is an appropriate alternative to the banking services which are available only to (15.5%) of the population. Shifting the digital payment improves the payment efficiency and speeds the transactions for the benefit of the businesses and households.

A group of researchers from SIMAD University led by Mr. Abdinur Ali Mohamed studied the effect of the mobile money service on business enterprises to explicitly discover the contribution of mobile money to business growth and its role in facilitating entrepreneurial development. The results show that mobile money has an enormous contribution to the growth of small and medium-sized enterprises in Somalia. The study indicates that a 1% increase in mobile money adoption, causes access to finance to increase about (13%), contributes to the sales growth by (3%), leads risk management to improve about (4%), and leads product development to increase about (9%).

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