A recent report commissioned by the African Economic Research Consortium (AERC) and carried out by the Economic Association of Malawi (ECAMA) has established that lower levels of financial literacy is one of three factors affecting mobile financial services in the country.

The study found out that although mobile financial services are gaining prominence, adoption and usage remains low, impacted by the high cost of internet and low rural penetration.

According to the research, the penetration of mobile phone technology increased from 1.8% of the population in 2004 to over 42.5% in 2016.

"Recent data indicate mobile money subscription stands at 3.7 million, representing 51.7 percent of total mobile phone subscription in Malawi," observed the report.

It added that active subscription remains low at 23.3% over a 30-day period and 34% over a 90-day period.

"Findings reveal the likelihood of using mobile financial services increases with increasing levels of financial literacy, type of employment and urban residence," reads an excerpt from the report.

Central Bank's Principal Analyst for National Payment Systems Chikondi Chigamba believes the study is a true reflection of the situation on the ground.

"The central bank has policies and regulations in place on how service providers can penetrate the country with their mobile financial services including the financial literacy aspects."

Reserve Bank of Malawi spokesperson Mbane Ngwira added that by September 2018, digital payments had increased by an average of over 30%.

"Our aim is to give more incentives to digital payments and the cash and checks will be phasing out," he said.

Officials from Malawi's only two mobile phone service providers Airtel Malawi and TNM agreed that more needs to be done to improve the level of financial literacy.

"We can do better to sensitise consumers on the mobile financial services and what they can do to maximise the service," said Airtel Malawi's Head of Mobile Money Chris Sukasuka.