NIGERIA: COVID-19 restrictions drive up mobile transactions 365% in 5mths

By Elizabeth Adegbesan

The value of mobile Inter-scheme transactions rose by 365 percent, year-on-year (YoY) to N853.7 billion in the five months ending May 31st, from N183.7 billion in the corresponding period of 2019. This huge growth, the highest in three years, according to mobile money agents was due to the restrictions in movement and visit to banking halls occasioned by the Coronavirus (COVID-19) pandemic.

Mobile Inter-scheme refers to transactions through the agent network of the 26 licensed Mobile Money Operators (MMO) in Nigeria.

The 365 percent YoY growth recorded by mobile interscheme transactions in the five months ending May 31st, dwarfed, 46 percent and 17 percent, YoY, growth in the value of Point of Sale (PoS) and Nigerian Interbank Settlement System (NIBSS) Instant Payment (NIP) transactions during the same period.

Furthermore, the mobile transactions performance represents a 540 percent increase when compared with the 57 percent YoY growth recorded in the corresponding period of 2019. Explaining the factor behind the triple digit growth, President, Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), Victor Olojo said: “The growth is due to the COVID’19 pandemic. The fact is that COVID’19 actually disrupted a lot of things and at the same time it also promoted and paved room for new growth and increases in businesses.” He however noted that the restrictions impacted some agents negatively, saying, “Not all mobile money and bank agents are actually smiling because of the lockdown.

We have agents that are located in the central business areas who had to shut down because they were situated in places like markets where they were asked to shut down. “There are also agents who are operating within residential areas, local suburbs, and local market areas. They were also able to make the greatest gains.”

Olojo however noted that notwithstanding the phenomenal growth, mobile money agents encountered some challenges as a result of the restrictions.

He said: “There were quite a number of challenges that agents faced during the period. They had issues of cash rebalancing; don’t forget that banks were not operating during the period of the lock down. So it was really difficult accessing cash. So we had to work out an indigenous model to address the problem of access to cash. What we did was identify businesses that were operational that moment. So instead of going to the banks to rebalance, we walk to pharmacies or filling, (fuel ) stations who were operational for rebalancing. So the arrangement we had was to transfer funds to them through NIBSS Instant Payment (NIP) and they in turn give us the cash equivalent.”