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Digitalization and mobile money in Senegal: Interview with Mamadou Lamine Gueye (CAURIE)

Five questions to Mr. Mamadou Lamine Gueye, Director General of CAURIE Microfinance Sénégal, on the most recent trends about digitalization and mobile money transfers in the country. 

Briefly, can tell us how CAURIE MicroFinance came to be, and the reasons behind such a project?

The Coopérative Autonome pour le Renforcement des Initiatives Économiques par la Micro finance was created in October of 2005. It was the result of a partnership between CRS Senegal, an American NGO, and the Catholic Church through Caritas Senegal. The scope of the initiative was to improve the living conditions of the most vulnerable Senegalese people by facilitating their access to credit.  It aims at (i) responding effectively to the growing needs of poor women micro-entrepreneurs— a key segment of the microfinance sector in Senegal; (ii) offering a range of adapted financial services, diversifying financial services, enhancing professionalism, and rendering autonomous the management of micro-enterprises; and (iii) achieving self-sufficiency and striving toward sustainability.

What are CAURIE’s main achievements and challenges to date, in particular in the area of remittances?

As a first critical step in the digitalization transformation process of all operations in the field, CAURIE leveraged the advantages of information and communication technology. However, other challenges also need to be taken into account, such as heavy cash handling.  In this regard, CAURIE’s digitization efforts have progressed through its Bank to Wallet project, which is currently operational for the general public. In fact, customers who subscribe to this option can conduct payment or withdrawal transactions between their CAURIE’s account and their Wallet (Orange Money for the time being).  Next, the CAURIE Mobile application will be launched, which will enable the issuing of electronic money. Additionally, CAURIE has been selected among eligible microfinance institutions (MFIs) for a regional project to promote access to the UEMOA (West African Economic and Monetary Union) electronic payment methods performed by the Central Bank of West African States (BCEAO), the Senegalese monetary authority. It is also worth noting that for several years CAURIE carried out money transfer activities as a distributor of Wari and Joni Joni. Contracts with both these operators have now been terminated to avoid the many risks of cyber-attacks. CAURIE still works with Western Union, which is operational at our offices. For the time being, we understand the pressing need to address new digital risks, the management of which is already taken into account in the update of our internal audit manual and staff training, 2020-2021.

How has the COVID-19 crisis affected your clients and more broadly the Senegalese remittance market, and how have you reacted?

As has been widely reported, no economic sector or segment of the population was spared by the economic impact of the COVID-19 crisis. The most vulnerable segments of the Senegalese population—the bulk of CAURIE’s clientele— have been hit particularly hard by the pandemic. For several weeks they faced a partial or total halt of their livelihood activities. Moreover, the decrease in remittances from family members living abroad resulted in diminished household incomes. To mitigate this situation, we put in place the following measures:

  • raising awareness on social distancing and practice good personal hygiene;
  • use of deferred repayment terms at no additional cost;
  • closure of recovery procedures;
  • use of payments through electronic money systems (Orange Money);
  • launch of our Bank to Wallet platform to facilitate transactions with customers; and
  • setting up a food assistance program (distribution of social grants and food kits with the help of some of our partners).

What are the main trends in digitalization and mobile money in Senegal, and how do they affect remittances domestically and internationally?

Different categories of players such as FinTechs, electronic money institutions, banks and MFIs are currently involved in the mobile money market. Additionally, the BCEAO is encouraging this ecosystem, notably through its interoperability project and the promotion of access to the digital means of payment of MFIs. The strengthening of the aforementioned ecosystem will consequently benefit digital monetary transactions (payments, transfers, money transfers, etc.) both domestically and internationally.

What is the next five-year outlook for mobile money in Senegal?

In my opinion, over the next few years, mobile money will be more relevant in the economic and financial lives of Senegalese households. Most likely, what is transpiring in Kenya with the mobile phone-based money transfer service M-Pesa could happen in Senegal as well.