Still a snail speed

Despite its huge potential and efforts by the Central Bank of Nigeria (CBN) and other financial services institutions to promote mobile payment adoption in the country, a new survey shows that the money service is still struggling to get a footing. But stakeholders believe operators and banks have failed to clearly define the benefits customers can derive from using the service

Going by the calculations of the Central Bank of Nigeria (CBN), if fully embraced, the introduction of mobile money services is expected to be a real tool for economic growth and development. As a matter of fact, the apex bank has never failed to tell its critics that mobile money would go a long way in providing basic fi nancial services as well as creating payment access especially to Nigerians without bank accounts, as well as to help drive fi nancial inclusion in the country.

Mobile money enables monetary transactions to be done on mobile phones through text messaging. Operations that can be carried out through the mobile money include money deposit, bill payment, funds transfer and withdrawal as well as payment for goods and services. It serves as an alternative way of storing money for both the banked and the unbanked.

In the wake of the introduction of the cash-less policy in 2011, an Enhancing Financial Innovation & Access survey had revealed that about 63.5 per cent of Nigeria’s adult males and 76.8 per cent of adult females are unbanked, while 78.8 per cent of the country’s rural populations are largely unbanked, thus creating enthusiasm among industry experts that with over 100 million active mobile subscribers, more unbanked can become banked through affordable, secure and convenient mobile money solutions.

However, almost two years after and despite its huge potentials and efforts by the CBN and other fi nancial services institutions to promote mobile payment adoption in the country, there are strong indications that the money service is still struggling to get a footing as majority of Nigerians still shun the mobile money services.

According to a recent survey conducted by the NOI Polls on the adoption of the mobile money services, while six in every 10 Nigerians (59 per cent) are not aware of mobile money services, only 13 per cent of those that are aware (49 per cent) of the services currently use it. Most importantly, of the 41 per cent citizens that are knowledgeable about mobile money services, only 13 per cent have adopted it, thus indicating a very low adoption rate.

NOI Polls is one of the world’s leading opinion research and knowledge management organisation, which provides timely and relevant information on people’s perspectives on a variety of socio-economic issues; the results are based on a nationwide telephone survey of randomly selected adults.

The poll conducted in the fi rst week of August was to explore the current level of awareness of mobile money services among Nigerians and to determine the present rate of adoption and potential for the future.

According to the NOI results, an overwhelming majority (93 per cent) of those that use the service, operate their mobile money account in connection with their bank accounts, while all the mobile money service users (13 per cent) are all banked showing little or no adoption of this service by the unbanked.

However, the report indicated a positive experience by the users highlighting ease of use, security, cost saving and time saving as factors that enhance this experience as according to the survey, about seven in 10 (71 per cent) non-users say they would consider using mobile money services in the future.

Another key fi nding of the study indicated based on geopolitical zones analysis, the South-South (54 per cent), South-West (46 per cent) and the North-Central (43 per cent) zones have the highest proportions of respondents who know of Mobile Money services. On the contrary, the North-East (70 per cent), South-East (64 per cent) and the North-West (63 per cent) zones account for the highest proportions of respondents not aware of the mobile services, among other fi ndings by NOI Poll.

As pointed out, the scheme might have suffered slow adoption by Nigerians as the licensed operators of mobile money services have not made a signifi cant headway in the deployment of the services across the states.

To experts, the scheme has no doubt been facing other challenges which include low awareness and adoption; lack of fi nance and basic infrastructure; very few agents; and the exclusion of mobile operators from taking part in the execution of the services.

For instance, according to the NOI survey, while majority of the users (86 per cent) had indicated ‘banks’ as their fi nancial service provider, it could be said that licensed banks have been mostly given the responsibility to establish the services in Nigeria. Relatively, only 12 per cent indicated ‘mobile money agents’ as their provider and one per cent indicated other sources.

However, industry stakeholders are quick to point out that if the mobile money service is to make any impact in the nearest future, one challenge that must be surmounted for the mobile money to have real impact on the unbanked population is inadequate agency network.

Obviously, it is no longer news that since the introduction about two years ago, the emerging mobile money industry currently lacks the requisite agent locations required to deepen the services’ penetration across all nooks and crannies of the country.

With an estimated population of 167 million people and 25.4 million bank accounts, while a larger number of Nigerians lack access to basic fi nancial services, out of over 50,000 mobile money agents estimated for the seamless success of the mobile service, currently, across the country, the operators have only managed to engage about 3,000. But experts noted that if anything at all; the number must even be increased to 250,000 in the nearest future.

In the real sense of it, mobile money agents are like mini bank outlets where different services like utilities, remittances, Person 2 Person (P2P) payment, and banking services can be conducted. Their major role in the mobile money ecosystem is to do cash in and cash out.

The Principal Associate, Mobile Money Africa, Emmanuel Okoegwale, affi rming this, noted that “The agency network that should make mobile money happen in Nigeria is not there now and this can affect the success of the mobile money system. In Nigeria today, we have less than 3,000 verifi able agents while in Kenya, there are 22,000 agents and 54,000 in Brazil. Mobile money operators will require adequate number of agents. If not, the unbanked people will not be able to access mobile money services.”

“If, for instance, I send money from my mobile money wallet to my cousin in Maiduguri and he cannot do ‘cash out’ due to the absence of an agent, then the whole essence of the mobile money system has been defeated,” he added.

Sola Bickersteth, Director, One Network, an industryfocused organisation helping to expand agent networks to 50,000 this year, says “The mobile money industry requires an estimated 250,000 or one agent per 3,000.

To Bickesteth, the industry has not done badly as “People’s responses have been very encouraging. We have a long list of interested agents, who can’t wait for the approval process to commence. Being a mobile money agent is a potentially lucrative job, if one gets a good location and is serious with the business.”

He, however, explains that One Network will not rest on its oars in expanding agency network in the country.

Explaining that his organisation will be supporting the Nigerian Postal Service in putting together all the necessary Information Technology and infrastructure tools required to interconnect and manage 50,000 or more locations, Bickersteth added that One Network is working with all the necessary stakeholders such as microfi nance and other banks, the National Directorate of Employment, CBN, associations and cooperatives, local and state governments to contribute to building the huge network.

The aim of this project, he says, is to create jobs in the country where unemployment is a major problem with no adequate solution in sight. “One Network plans to build a structured and open nationwide network of 50,000 neighborhood agents that provide public access to citizens and fi nancial services through about 3,000 agent supervisor locations, such as post offi ces, microfi – nance and other bank branches,” he stressed.

Bickersteth, who discloses that 12 mobile money operators have signed an agreement with NIPOST, says that the One Network project will play a major role in creating employment for thousands of Nigerians as it establishes agent locations across the country for the mobile money scheme.

According to him, creating more mobile money agent locations will generate over 250,000 new jobs in the next three years. Some of the services that can be offered by a typical agent point are SIM card and public identity registration; educational services registration; government services registration; mobile money and money transfer services; utility bill and tax payments as well as public and micro insurance services. Others are card issuance and collection; online business services; and information verifi cation services, among others.

However, the CBN as well as the major stakeholders in the mobile money industry are of the belief that despite the hiccups, the country’s cashless banking policy has continued to record growing acceptance, as there have been over 200 mobile money transactions worth N8 million done daily. These are specifi cally transactions from one mobile scheme wallet to another as well as from mobile scheme wallet to bank accounts.

It would be recalled that minister of communications technology, Omobola Johnson had noted that mobile money transactions is expected to hit N151 billion by 2015. According to her, while total value of transactions on mobile money networks, currently stands at N228 million, the total volume of non-store shopping increased from N62 billion in 2011 to N77.5 billion in 2012. Analysts say non-store shopping is largely been driven by the Internet.

Analysts believe that the constant growth of the formal retail sector in Nigeria, along with rising internet penetration in the country, has been driving the expansion of online retailing. According to Johnson, the fi gure for non- store shopping will increase to N658 billion by 2015.

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