Why Nigeria’s Mobile Money Scheme Penetration is Low


Mobile money operation in Nigeria is still crawling at one percent penetration after being in existence for six years. Why?


By Anayo Ezugwu

After six years of operation in Nigeria, mobile money has attracted only one percent penetration in the country. Umar Danbatta, executive vice chairman, Nigerian Communications Commission, NCC, lamented that mobile money is crawling at one percent penetration in the country because it is bank-led.

Danbatta in an interactive session with journalists in Lagos, said only about two million of Nigeria’s estimated 198 million populations make use of mobile money, unlike in Ghana and Kenya where penetrations have reached 40 percent and 60 percent, respectively.

The implication of this is that despite the innovation that comes with it, Nigerians are yet to tap from the huge benefit it carries. Nigeria is currently home to about 21 mobile money operators, which comprised 15 non-bank operators and six bank operators that have been carrying out commercial operations.

According to him, other regions, where the scheme is thriving is because it is telecom-led, “as such we need to re-direct our focus and ensure that appropriate model is adopted adequately.”

Danbatta said there should be effective cooperation among all the various stakeholders in the value chain that is the telecommunications operators, agents, CBN and the services providers too. He revealed that discussions are on-going in the industry on how to get telecom operators to become super agents in the scheme of things.

“With the population we have in the country, Nigeria should play big in the mobile money ecosystem in Africa. Only about one per cent that is about two million Nigerians is currently on the scheme. That is rather too poor. All hands must be on deck to revive that sub-sector of the economy. If we are to improve on Nigeria’s digital landscape, we must revive the mobile ecosystem, which includes the mobile money scheme,” he said.

To ensure that mobile money operators are efficient, the Central Bank of Nigeria, CBN, wants to revoke licences of some the operators that have increasingly found it difficult to operate in the country. CBN said it has set a new capital requirement of N2 billion for the licensees and any operator that fails to meet the recapitalisation by July 1, this year, will have its licence revoked.

Isaac Okorafor, acting director, corporate communications, CBN, said with the potential explosion in mobile money and other related activities, the CBN, after very rigorous research and consideration, came up with the new capital requirement to make for a strong mobile money industry.

He said the initial capital requirement was N500 million, stressing that the operators were required to have met N1 billion at the end of December 2017 and to make up N2 billion by July 1.

Mobile money is an aspect of financial transactions where financial values are transferred from one person to another using Unstructured Supplementary Service Data, USSD, platform on mobile networks. The electronic fund transfer platform was introduced to complement the entire spectrum of cashless economy policy effectively introduced by the apex bank in January 1, 2012.

Till date, only 21 mobile money licences have been issued by the CBN with only a few of them operating effectively, including United Bank for Africa/ AfriPay (U-Mobile); Zenith Bank (EazyMoney); GTBank (GTMobileMoney); FirstBank/Pridar – (First- Monie); Stanbic IBTC (*909# Mobile Money) and Ecobank (Ecobank Mobile Money) and others.

The mobile money operators not backed by any bank have had their operations crumbled due to what industry pundits refer to as “paucity of funds to run effective operations to compete in the financial services market” and may find it difficult to meet the deadline “without some re-alignment.”

Operators within this precarious fold, as gathered, include Parkway Projects (ReadyCash); eTranzact (PocketMoni); PagaTech (Paga); Fortis MFB (Fortis Mobile Money); Monitize (Monitize mobile money); FETS (My Wallet); Eartholeum (QikQik); Teasy Mobile (Teasy Mobile); Mkudi (Mimo); PayCom (Payment Irrespective of Distance or Obstacles – PIDO); VTNetwork (Virtual Terminal Network – VTN) and Cellulant (CeLLulant) among others.

Despite having 21 mobile money operators licensed by the CBN in circulation, the volume of transaction on the payment platforms is still grossly low, according to data obtained on NIBSS official website.

– Apr. 20, 2018 @ 17:31 GMT

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