Why mobile money in Nigeria lags behind —Pwc

THE mobile money service in Nigeria, predominantly bank-led not growing at the same pace as its two African neighbours for a number of reasons, says PriceWaterhouseCoopers (PWC), a global consulting and financial company.

In its Financial Focus, a Journal of Financial Services in Nigeria, PWC stated that banks were not motivated to develop the mobile money service as this service typically targets lower income earners compared to the middle to high-income earners targeted by banks.

Also, PWC observed that mobile money is not growing because the Central Bank adopted a protectionist approach and placed a number of restrictions on Mobile Money Operators (MNOs) providing mobile money services.

It stated that these have had the effect of reducing financial inclusion, even as  the percentage of  Nigerians with access to financial services reduced from 44 per cent in 2014 to 40 per cent in 2017.

This, according to PWC, is a poor performance compared to the inclusion rates in other African countries namely: Kenya with 84 per cent, 78 per cent in Uganda and 58 per cent in Ghana.

• Financial inclusion and you

In a bid to revamp financial inclusion of the Nigerian populace, the Central Bank of Nigeria (CBN) in October 2018 called on all its major stakeholders to establish Payment Service Banks (PSBs) that will operate mostly in the rural centres  and unbanked locations. These PSBs were required to establish Automated Machines (ATMs) in these areas, operate through banking agents (in line with the CBN’s Guidelines for the Regulation of Agent Banking and Agents Banking Relationships in Nigeria), be technology-driven and shall conform to best practices on data storage and integrity.

PWC therefore  called on the Central Bank as well as mobile money operators (MMOs), to engage in awareness programmes and campaigns through local  influences to educate the public on the benefits of mobile money.

Mobile money was introduced in Ghana by MTN, the country’s largest mobile network operator (MNO), in 2009. Initially, there was resistance by commercial banks to the development of mobile money banking by MNOs but the Bank of Ghana (BoG) overcame this by implementing regulations that allowed MNOs to set up subsidiaries to engage in the business of mobile money, independent of their core operations.

Since then, mobile money has generated steadily increasing cash flows and is currently a force to reckon with in the financial services space.

The Bank of Ghana reported that the volume of mobile money transactions registered a growth rate of 737.4 per cent from 2012 to 2016, just as evidence suggests that 98 per cent of digital payments in Ghana currently is from mobile money transactions.