The report of the National Assessment of Terrorist Financing Risks states that the Electronic Money Institutions (EMI) sector, which operates through mobile telecoms operators, represents a high level of threat for terrorist financing.
The government document, published by Lusa, emphasises that there is an excessive movement of funds to active terrorist threat zones using EMIs operating in Mozambique.
“In these areas, there is a preference for the use of Electronic Money Institutions, given the ease of service and rapid movement of funds. These factors combined precipitate and make the abuse of this sector by terrorist sympathisers attractive,” the document explains, according to which the mobile money market has been growing due to the increase in the number of mobile phone users, and the level of penetration in rural areas is quite high compared to traditional banking. In fact, in September 2023, the value of the EMIs’ assets totalled 16.9 billion meticals and their accumulated share capital was 2 billion meticals.
“Access to formal financial services by the Mozambican population is low, with an estimated level of bankarisation of around 30%, with the expansion of EMIs being one of the factors to boost financial inclusion and allow easy movement of funds between people,” the report stresses.
“In these areas, there is a preference for the use of Electronic Money Institutions, given the ease of service and rapid movement of funds. These factors combined precipitate and make it attractive for terrorist sympathisers to abuse this sector”
The document also reveals that “at the end of 2021 and beginning of 2022, in Cabo Delgado province, particularly in rural areas, transactions were mostly made in cash and using mobile wallets. Given the weak control of the system, terrorists used mobile wallets as the preferred mechanism to move funds channelled by family members, friends, sympathisers and others.”
“The financial intelligence authorities have notified the institutions providing electronic money about the movement of large sums of money through these channels and in areas with an active terrorist threat, and have been instructed to send regular reports of suspicious terrorist financing transactions,” he concludes.
