Nearly one out of every four bank accounts in East Africa remains inactive as consumers trade traditional banking for the convenience of mobile money services, the findings of two separate studies show.
Rwanda tops the list with 37 per cent of its bank accounts classified as dormant — unused for more than 90 days — followed by Kenya with 25 per cent inactive accounts, according to a study by InterMedia, a Washington-based research firm.
In Tanzania, 24 per cent of bank accounts have been lying idle for more than three months, and 21 per cent of Ugandan financial institution accounts are inactive, the report shows.
Meanwhile, the World Bank’s 2014 Global Findex report puts Tanzania’s bank account dormancy rates at 37 per cent followed by Kenya with 21 per cent; Uganda is at 12 per cent and Rwanda at seven per cent.
Financial institution accounts with zero deposits or withdrawals over a one-year period were classified as “inactive,” the World Bank says.
Interestingly, the report establishes that holders of these bank accounts are still financially active and engage in other fiscal transactions mostly via mobile money — such as sending money to family and friends, paying utility bills and receiving diaspora remittances.
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