By Modest Ipangelwa
The debate around financial inclusion in Africa often frames banks and telecommunications companies (telcos) as rivals. Banks view themselves as custodians of trust, regulators see them as systemic anchors, while telcos are cast as disruptors pushing into financial services.
But in reality, telcos are not purely competitors, they are enablers. For Namibia and other markets striving for deeper inclusion, telcos represent a vital opportunity to extend the reach of financial services to people and businesses still left outside the banking system.
Telcos as Bridges to the Unbanked
The unique advantage of telcos lies in their infrastructure and customer base. Mobile operators already reach millions of people, including those in rural and remote areas where banks are absent.
Their SIM registration databases and distribution networks give them unparalleled access to underserved populations. By embedding financial services into mobile platforms, telcos can lower barriers to entry; opening a wallet requires no collateral, no credit history, and no visit to a physical branch.
In countries like Kenya, the rise of M-Pesa—launched by Safaricom in 2007 demonstrates this power. Within a few years, millions who had never held a bank account were transacting, saving, and even accessing credit through their phones.
Today, M-Pesa processes more than 60% of Kenya’s GDP annually, and banks have not disappeared. Instead, they have found ways to integrate with the system, offering customers more sophisticated products while relying on telcos for distribution.
Why Banks Need Telcos
Banks cannot ignore this reach. The traditional branch-and-ATM model is costly to sustain, particularly in sparsely populated or rural regions. Telcos, on the other hand, already maintain agent networks for airtime distribution that can be repurposed for cash-in and cash-out services.
In Tanzania for instance, banks partnered with telcos to enable interoperability across mobile money platforms. This allowed customers of one telco to send money to another, and banks used the same infrastructure to expand their footprint without heavy capital investments.
In Ghana, mobile money adoption surged when telcos entered the market.
Banks initially resisted, but they soon recognized an opportunity and telco wallets became feeder accounts, and partnerships emerged where banks offered savings, loans, and insurance products via mobile channels. By 2022, mobile money transactions in Ghana were valued at over US$250 billion, showing how telcos can drive volume that banks alone could never reach.
Beyond Payments: A Partnership Model
The role of telcos extends beyond basic payments. They can serve as entry points for micro-savings, micro-loans, and even cross-border remittances like what we have seen recently happened in Namibia.
In Uganda, MTN Mobile Money partnered with banks to allow rural farmers to save small amounts securely, with interest paid through bank integration. In Côte d’Ivoire, Orange Money collaborated with financial institutions to provide credit scoring based on mobile usage data, giving small traders access to loans without collateral.
These examples show that telcos’ role is not to replace banks, but to complement them. Telcos excel at distribution, scale, and customer onboarding.
Banks bring in regulatory credibility, sophisticated risk management, and the ability to transform small-value deposits into broader financial intermediation. Together, they can address both sides of the inclusion gap, which is access and depth.
Lessons for Namibia in midst of disruption
In Namibia, where large parts of the population remain underserved, the entry of telcos into payments and wallets should not be viewed with suspicion. With regulatory frameworks such as PSD-3 now creating space for non-bank e-money issuers, collaboration is the way forward.
Telcos can leverage their wide footprint to bring millions into the financial net, while banks can focus on developing value-added services, credit, investment, and insurance delivered through digital channels.
Rather than seeing telcos as rivals, banks should view them as allies that can reduce acquisition costs and accelerate financial deepening. The risk lies not in telcos crowding banks out, but in the system failing to integrate these two powerful forces.
In conclusion, financial inclusion requires scale, trust, and innovation. Banks have the trust and regulatory framework, while telcos have the scale and access.
When they work together, the financial system expands beyond city centers and formal employment, reaching traders in markets, farmers in villages, and youth in informal economies.
The lesson from Kenya, Ghana, and Tanzania is clear; telcos are not the competition; they are the bridge to inclusion. Namibia has the chance to follow suit, if it embraces partnership over rivalry.
* Modest Ipangelwa is a Coverage eBanker for First National Bank and FinTech Expert.
