Mobile money in Nigeria’s peers to spur country’s financial inclusion
As Nigeria lingers on financial inclusion, Kenya and Ghana continues to show the rest of Africa the way through mobile banking.
Nigeria can increase its financial inclusion rate if it follows in trend of its Africa peers in the use of mobile phones for banking, popularly referred to as mobile money.
The mobile money initiative is a financial services platform that allows its users to use their mobile phone as a mobile bank account, meaning the individual does not need to open a bank transaction account with any financial institution before having access to financial service, like making payments, transfer, receiving money and loans grants.
As long as a mobile telephone user registers for the service, the individual can open a mobile account and be able to make transactions using the same medium.
This is made possible by the collaboration of the phone network service providers and the financial regulator in the country.
“The growth in the use of phones for banking in Ghana comes as mobile money continues to expand across sub-Saharan African and has been a key tool in advancing financial inclusion,” GSMA Intelligence said in a report last year.
Also in Kenya, M-Pesa, the mobile money system that is the pride and anchor of Kenya’s homegrown technology community, has had plenty of hype and excitement since its 2007 launch.
The service, developed by Kenya’s largest phone operator Safaricom, enables almost 30 million people to pay for everyday goods and services, access loans, and send money all over the world. Around $28 billion flowed through it in 2015, equivalent to around 44 percent of Kenya’s GDP that year.
If Nigerian telephone service providers key into this, it could mean that every Nigeria that have access to a mobile phone and wish to tap from the service, regardless of their location in the country can have access to financial services, as they would not have to open a bank account. This could lead to more financial inclusion as people who are in the rural areas couple with those who do not have the financial resources to operate a basic bank account can be able to now have access to financial services.
According to the telecom sector report from the National Bureau of Statistics (NBS), the Total Active Voice Subscription and Total Active Internet Subscription in the fourth quarter of 2017 was 145 million and 98.699 million respectively.
The service has spread to 10 countries, including Albania, Egypt, Romania, Lesotho, and Tanzania. Its success at the forefront of the disruption of cash usage has helped support a local technology start up scene in Kenya and attracted international partners, making Nairobi one of Africa’s leading tech hubs.
While in Ghana, the value of deposits and withdrawals by the use of mobile phones for banking almost doubled in 2017, according data published by the central bank.
The value of mobile transactions rose to 155.8 billion cedis ($34.6 billion) last year from 78.5 billion cedis in 2016, Bank of Ghana said in a statement on its website on Monday. The volume of deposits and withdrawals rose 78 percent to about 982 million, according to the statement.
Meanwhile, the Central Bank of Nigeria (CBN) aims at attaining 80 percent financial inclusion rate and 20 percent exclusion by the year 2020.
This is however seen as ambitious by analyst as the inclusion rate in Africa’s largest economy reduces by 2.1 percent between 2014 and 2016.
Endurance Okafor