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Money supply is the main driver of economic activity in any economy and this money moves seamlessly from hand to hand, the economy grows faster as commerce moves smoothly. According to Zandi et al, cashless payments boost private consumption by 0.7 percent and the rise in consumption is found to contribute 0.17 percent to the GDP growth for a group of high-income countries among the 56 countries studied. It is therefore not far-fetched to think that at a time when some countries in Africa are experiencing cash shortages which lead to slower commerce, adopting cashless payments is the way to go to ensure steady economic growth.

For every Cameroonian “il n’y a pas la monnaie” is a normal statement that is expected every time one tries to pay for something that will warrant that the merchant gives a difference. And this has been going on quietly for about 3-5 years. It started with the coins and has now extended to almost every single legal tender token we use. This shortage of tokens slows down commerce, frustrates both buyers and sellers, and has created an opportunity for counterfeit money. This issue can of course not be solved by simply printing more cash, which would lead to inflation and so the average citizen just has to grapple with this problem on a daily or try to convince the seller to take payment via MoMo from MTN or Orange Money Africa and Middle East and hope that said merchant shares the same mobile telephone operator like him or her, then things become a little easier. So while Orange Money and MOMO by MTN have done a great job of permitting money to move more seamlessly from person to person and from person to business, the MSMEs are still struggling with issues related to the availability of cash tokens and that has become a serious hiccup for commerce, and I believe a more comprehensive cashless payment solution built on the infrastructure provided by MOMO and Orange money can address this issue.

Another problem that I’ve noticed as a young businessperson in Cameroon is that there is very limited access to capital as the conditions to get a loan from a bank and other financial institutions are heavily hinged on having collateral that is usually worth double the loan required. This huge requirement for loans isn’t out of the blue. It is noteworthy that the only way for most financial institutions to know how much money their client makes or what passes through the hands of their clients is through whatever the client tells them or saves with them. Given that money first goes to the client before making it to the financial institutions, building trust is a very difficult thing to do. But what if financial institutions could track how much money their clients made and could recover their loans before the client’s other problems came to take the cash away? I think if this was possible, it would be easier to build systems of trust that reduce the need for huge collaterals as there will be increased transparency in financial dealings, and off the top of my head, the only way I can see this happening is by empowering MSMEs(who suffer most from limited access to capital) to receive cashless payments seamlessly.

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Cashless payments are not new to Africa. As earlier mentioned, Orange Money and MOMO are very big cashless solutions in Cameroon, and they are just a microcosm of the cashless revolution that has been coursing through Africa since 2007 when Kenya’s SAFARICOM launched M-PESA. Since then, M- PESA has grown to serve about 51 million Africans and currently processes more than $ 300 billion yearly. M-PESA isn’t the only mobile money solution in Africa, others include MoMo by MTN, Orange Money by Orange, and Airtel Money by Airtel. These telco-powered solutions are Africa’s first and foremost cashless solutions and in less than 2 decades of presence on the continent, the adoption of these solutions has proven that Africa’s potential is ripe for tapping and that Africans are ready to embrace innovations that can boost economic growth and solve local problems. But these mobile money solutions are not enough in themselves. Recently, Cameroon has seen a growth of payment solutions for businesses and personal finance solutions for individuals, and yet, MSMEs still struggle with a shortage of cash tokens and access to capital.

I believe that the solution to building a more trustworthy and resilient financial system that will address some problems related to safety, speed of transactions, and access to capital for the smallest businesses in the informal economy will be to go completely cashless. The big question is, HOW?