Why Mobile Money Services Can’t Start

Sanusi Lamido Sanusi, CBN, governor
Sanusi Lamido Sanusi, CBN, governor

More than two years after, 16 banks, which got licences to offer mobile money services in Nigeria, are yet to do so despite the heavy investment in the scheme

|  By Anayo Ezugwu  |  Sep. 23, 2013 @ 01:00 GMT

TWO years after the Central bank of Nigeria, CBN, licensed 16 banks and other financial institutions to operate mobile money services across the country, the operators are yet to do so in spite of huge the investments already channelled into the scheme. This has been attributed to poor awareness, inadequate agency network, lack of capital, technology issues and non-inclusion of telecom operators in the scheme.

Experts in the industry said that if the telecom mobile operators were allowed to drive the mobile payment scheme in Nigeria, it would create an unequal playing field for mobile payment operators in the country. Tayo Oviosu, a financial expert, said that the mobile telecom operators obviously have a greater access to a large percentage of the population and infrastructure for the deployment of the mobile money service and should have been given an upper hand. According to him, the telecom companies would match the achievement of other countries if they were given the opportunity to roll-out the service. “Don’t forget that the mobile money service is targeted at a particular group of people, the rural areas, the unbanked, who all have a mobile phone and believe in the mobile operators to keep their SIM cards active,” he said.


He said that direct contact and educating telecoms subscribers, easy access to cash remitted to users, amongst others are critical to growing the mobile payment service in Nigeria. He, however, linked the inability of some mobile money companies to roll out services to poor funding, technology challenges and limited distribution channels, among others. But hope is not yet lost. The Nigerian Communications Commission, NCC, has said it would develop an all-inclusive regulatory framework geared towards supporting telecommunications operators in the deployment of mobile payment services in the country.

Henrietta Bankole-Olusinawho, head of payments and mobility, Accenture Nigeria, said that mobile money operators and their regulators needed to show more commitment, in order to attract investment and drive the industry. According to her, two years after the providers gained the license, the mobile money sector is yet to understand the factors of the mobile money policy, and play on it with a view to win investments as well as users.

Bankole-Olusina stated that the success of mobile money services, acceptance of the services by the rural dwellers and investment in mobile payment infrastructure would only come when people realised the opportunities inherent in that industry. “Capital will always go to where there is an opportunity and mobile money subscribers far outnumber personal computer users and the banked in Nigeria. That is a great opportunity the providers have failed to utilise,” she said, adding that if they continued to target only the banked, then the unbanked that are the main crux of the initiative would not be captured.

Chris Uwaje, president, Institute of Software Practitioners of Nigeria, said that certain gaps in the scheme must be addressed for it to be successful. “There are lots of things we cannot go to market and buy, one of those things are good policy and strategy instrument. We need them. We always find ourselves running without equipment, so we need to equip ourselves with what we need to run with,” he said.

Dipo Fatokun, director, banking and payments system department, CBN, said there is a huge gap in the scheme. He noted that no nation could progress or truly develop if majority of its population are under-banked or has no access to financial services. Fatokun said the CBN was vigorously working to ensure the success of the mobile money initiative as a financial inclusion strategy to reduce the nation’s unbanked population by 20 percent. “The percentage figure of Nigeria’s unbanked population currently stands at 46.3 percent and the CBN will work to ensure the success of the strategy,” he said.

Meanwhile, mobile money services enable users to transfer money and pay bills through their mobile phones. This has become imperative considering the fact that there are only 21 million bank accounts in Nigeria and the whole essence is to provide financial inclusion of the unbanked and under-banked Nigerians, who have never owned bank accounts. This service allows users to send and receive money, pay their bills, anywhere, anytime, through their mobile phones, in view of the cash-less policy of the CBN.

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