"Mobile money embodies financial opportunity in Somalia. Deemed convenient, affordable and fast, mobile money has been widely adopted. It has reached a penetration rate of 83% in urban areas, 72% in IDP camps and 55% in rural areas, compared to a penetration rate of 15 for formal bank accounts. Given the depreciation of the local currency and lack of other satisfying and accessible alternatives, people and firms rely heavily on mobile money for their daily money transfers, and mobile money services have been acting as a virtual dollarized currency. Thus, mobile money has become the primary financial instrument in Somalia and Somaliland while cash usage is decreasing. The ecosystem is also already robust, with nearly two thirds of users choosing to keep funds in their mobile accounts rather than cashing them out. Large shares in the value mix of disbursements and bill and merchant payments suggest an expanding ecosystem of institutions and businesses using the system. Most of the success has been due to the home grown nature of mobile money. Mobile Network Operators have managed to nurture, from scratch, a local context appropriate, unique and compelling mobile money ecosystem that meets Somalis’ needs. This is a substantially different environment than telecommunications in countries across the rest of the African continent, which have traditionally been dominated by incoming multi nationals such as India’s Bharti or France’s Orange. Given Somalia’s complex political environment and volatile security conditions, investments in telecommunications have been almost exclusively led by Somalis, both from the diaspora and within the country. As a result, the ICT sector has been able to leverage Somali social and business networks, and has created products uniquely suited to the Somali context. While mobile money services are broadening the reach of financial services for the unbanked, the most vulnerable are more likely to be excluded from the system. Barriers to direct use by the poorest segments include cellular coverage, cost of phone ownership and use, limited access to electrical power, illiteracy and the predominance of mobile money services being offered in USD (rather than the local Shilling valued in rural areas). Nevertheless, there is strong evidence of a social impact Mobile money circulates across groups of different vulnerability levels and in a society of frictionless financial interdependence, mobile money enables more fluidity within the family and clan, and constitutes a lifeline for the poor. Mobile money transfers from NGOs and aid agencies also contribute to flows targeting vulnerable populations." (Executive summary)