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Many Transactions in Sub-Saharan Africa Still in Cash

Many Transactions in Sub-Saharan Africa Still in Cash

by Jake Kendall and Jan Sonnenschein

This article is the first in a three-part series on payments and money transfer behavior of sub-Saharan Africans highlighting the most pertinent results from a new Gallup study funded by the Bill & Melinda Gates Foundation.

WASHINGTON, D.C. -- Fifty-three percent of adults in 11 sub-Saharan countries interviewed in 2011 -- or about 134.3 million people -- made transactions involving distant counterparties in the 30 days before the survey, according to a new Gallup study funded by the Bill & Melinda Gates Foundation. Despite the large flow of nationwide transactions, few in the countries surveyed used formal payment channels. Thirty-one percent of all adults (approximately 79.0 million people) used only informal, cash-based modes -- such as informal money carriers, sending the money by bus or traveling friends, or simply carrying cash themselves to deliver it in person -- to move money across the country.

market overview transactions in SSA

Sub-Saharan Africans were far less likely to have used only electronic payments (via bank, mobile phone, or formal money transfer services such as Western Union), with 9% of all adults (roughly 22.7 million) saying they made their payments this way. Thirteen percent of all adults (approximately 32.8 million) used a combination of electronic and cash payments. Forty-seven percent -- or about 118.4 million adults -- made no payments of any kind.

These results come from a new study of 11 sub-Saharan African countries, "Payments and Money Transfer Behavior of Sub-Saharan Africans," which offers an in-depth look at sub-Saharan Africans' payment behaviors regarding domestic and international remittances, government and wage payments, utilities, and other bills. The survey did not include questions on face-to-face retail transactions and instead focused on the more challenging need to move money over distances.

Individual Markets Vary in Their Levels of Payment Activity, but Cash Is Everywhere

While the study generally shows a great need for better ways to send money to distant places in sub-Saharan African countries, the surveys also illustrates great regional diversity, with payment and money transfer behavior often varying considerably from country to country.

For instance, Kenyans and South Africans were the most likely to have made any transactions in the 30 days before the survey (76% and 69%, respectively), while residents in Rwanda and Mali were the least likely to do so (24% and 27%, respectively).

Market overview by country and market size

South Africans and Kenyans were also the most likely to have used only electronic channels (18% and 15%, respectively). In all other countries, fewer than one in 10 respondents used only non-cash channels. In Mali, Rwanda, and Sierra Leone, a handful of respondents reported this (1% to 2%).

However, even in South Africa and Kenya, the two countries with the most advanced payment markets, respondents were more likely to report that they only used informal cash payments than to have used only electronic payment methods; 31% of South Africans and 22% of Kenyans used only informal cash payments in the past 30 days. These percentages translate into 10.9 million and 5.2 million potential consumers of financial services, respectively.

The best growth potential in sub-Saharan Africa is likely in Nigeria. The subcontinent's biggest market, with an adult population of 90.6 million, is still mostly untapped. An estimated 34.8 million Nigerians are using only informal cash payments -- presenting a huge opportunity for any financial services provider that can put in place new technologies and innovative partnerships.

All Societal Groups Resort to Cash Frequently

Highly educated respondents, urban city dwellers, respondents who report being employed full time for an employer, white collar workers, and respondents living on more than $2 a day were considerably more likely than their socio-demographic counterparts to report having made any transactions 30 days before the survey. That said, city dwellers, full-time employees, and those living on more than $2 a day were still more likely to have only made informal cash payments than to have exclusively used electronic payment methods.


Large numbers of adults in Sub-Saharan Africa are underserved when sending informal cash payments or when not sending money at all because of the hassle, high costs, and risks of informal mechanisms. The high degree of need that drives people to make these informal payments represents a major profit opportunity for service providers of remittance and payment services like mobile money. The study's results also point to the need for policy reforms aiming at lowering regulatory barriers to competition from mobile operators and other non-traditional payment providers who can reach these underserved populations with services.

Read the complete report and questionnaire.

For complete data sets or custom research from the more than 150 countries Gallup continually surveys, please contact or call 202.715.3030.

Survey Methods

Results are based on face-to-face interviews with 1,000 adults, aged 15 and older, conducted June-October 2011, in 11 sub-Saharan African countries. Regional totals presented in this article are population-weighted averages, accounting for the population size of a country. For results based on each sample of national adults, one can say with 95% confidence that the maximum margin of sampling error ranged from ±3.5 percentage points to ±4.3 percentage points. The margin of error reflects the influence of data weighting. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

For more complete methodology and specific survey dates, please review Gallup's Country Data Set details.

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