In a developing economy like Nigeria’s, the really huge attraction of mobile money is its unique ability to reach individuals with no access to banking

Why Is Mobile Money In Nigeria Targeting The Banked?

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Mobile Money

In a developing economy like Nigeria’s, the really huge attraction of mobile money is its unique ability to reach individuals with no access to banking services. The unbanked. Like the undead, if you are into that sort of thing. This country particularly has a huge market made up of this category of people – the unbanked. When you look at that market, we are looking at a massive opportunity, a massive potential waiting to be tapped by mobile money operators. Perhaps it is just me, but I have quietly watched the mobile money thrust in the country, and I am wondering why the target seems to be mostly people who do not need the services – those of us who already have access to banking services.

Exactly what is the incentive that mobile money offers me when I already have access to internet banking services and ATM/Visa/MasterCard facilities which I use regularly? Why would mobile money be appealing to me? I have tried out a couple of the available mobile money services, and the extra hoops and steps involved in using them immediately render them redundant. It is just faster and easier to use my debit cards and internet banking services to transfer funds and make payments. I have not seen one single scenario in which mobile money (at least as implemented here) has made my transactions easier or faster.

But, switch over to the unbanked, and immediately the benefits shine. So far, mobile money in Nigeria is a phenomenon that has failed to catch on. Yes; there are activities going on in the unbanked sector, no doubt. Yes; transactions are going on, but the sum total is a speck in the sand, a drop in the ocean of what can be.

I understand that there are fundamental problems from the regulatory frameworks and structure. I do not believe that this is because the government does not know that they are placing obstacles in the way of adoption. As is mostly the case, I suspect that the centre wants to make sure that they can dip their hands in the basket for pickings. I have seen too much of this sort of thing go on here to believe that it is only ignorance that is behind those choices. Sometimes, those in power know what to do to make things work smoothly. They just don’t go that route because should they, they lose control – and the opportunity to steal.

Whatever the challenges of mobile money in Nigeria, they need to be faced. There is a huge market out there that needs those services. A very big market.

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  1. Why are they targeting the people with bank accounts?

    1. People with bank accounts (especially in a bank-ledMM ecoystem) are low hanging fruit in terms of adoption because they are easier to reach, easier to educate and have more disposable income than their unbanked counterparts.

    2. They have so far been unable to figure out or enable more interesting value propositions and compelling use cases that will appeal to the unbanked demographic, beyond airtime purchases and P2P transfers. And the problem with those two? You can easily buy airtime across the street, it’s not a “problem” that mobile money solves. Andthe agent network infrastructure required for P2P. transfers to work are still in their infancy.

    Maybe they aren’t exactly “targetting” the banked per se. Maybe it’s just a case of the banked being easier targets, due to the above factors and more.

    Of course this by no means excuses them from their responsibility to try harder to reach the intended demographic.

  2. Kenya has been a great example of how to get the mobile money working. God forbid the Giant of Africa should want to learn anything from such a lowly minnow.

    Personally I see no use for going through a bank to set up mobile money, especially in my neck of the woods where the population is dense and there are only 2 banks in town (more like 1.5, the other bank being tiny).

    Sadly as with most things, good idea let down by poor execution and over-regulation.

  3. ‘Mbido akwa na afia aru’ – meaning that starting a crying party is hard but flows easily once it’s on. People may not appreciate the tons of creative energy and investments that is currently being poured into this industry but I believe that before the year runs out, most of the underground works will have started yielding results.
    Critical to the success of Mobile money services is the massive network of Agents that needs to be recruited and trained to service the customers, and this is what most operators are currently engaged in.
    Surely one has to start with the banked, they are the ones that remit funds to the unbanked, so it’s in order that they get comfortable with the services and then help spread it.
    This is still the planting season for mobile money, we’ll get to the critical mass, and then boom!
    Government is also trying with the policy angle, giving the Agric ministry’s plan to send MM tokens to farmers to use in redeeming seedlings and fertilizers, though they added their criminality with the unscrupulous phone purchase.

  4. There are not “fundamental problems from the regulatory frameworks and structure”. This is a fallacy.

    Financially including people who are now unbanked takes (1) compelling value propositions, (2) agents and (3) education/public awareness. It needs banks and telecoms to embrace their roles.

    Though mobile money has not been an immediate sprint out of the gate in Nigeria, it is happening and faster than you think. Hockey stick growth is coming. People complained that mobile money was taking off slowly in Ghana, and now the market is changing, it is getting better. Nigeria will be big.

  5. The trend of mobile money is changing now as the leading lights are currently designing their strategies to tap the opportunities that huge nigerian market presents in term of the unbanked segment of the economy. To be part of the beneficiary of this drive call me on +2348038331864. Best regards

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