Nigeria: Making Mobile Money More Effective

A recent survey that showed that 37 per cent of Nigerians are not aware of mobile money and as such, do not use the payment platform, is worrisome.

According to the report by Philip Consulting, out of the remaining 63 per cent respondents that knew about mobile money, 31 per cent were between the ages of 26 and 35 and constituted the majority.

Also, 15 per cent were between 36 and 45 years, 10 per cent between 18 and 25 years, five per cent between 46 and 55 years and one per cent each for the under 18 and over 55 years age group.

"The result of this survey demonstrates that although most of the respondents know about mobile money, adoption of its services is low because many of them are not registered and thus do not use the service," it stated.

Mobile banking can be viewed as an innovation that lowers trading costs, transaction time and allows for immediate financial transfers (credits and debits) by both the formal and informal sectors. It has the potential to drive financial inclusion by providing efficient transaction options and greater reach.

Mobile money is also a tool for economic growth and development, if fully explored. It enables monetary transactions to be done on mobile phones through text messaging.

The Central Bank of Nigeria (CBN) had introduced mobile money services to provide basic financial services and create payment access especially to Nigerians without bank accounts, as well as to help drive financial inclusion in the country. 16 banks and other financial institutions were licensed to establish the services all over the states in August 2011 by the CBN.

A survey by the NOI Polls had also attributed the slow pace of adopting the mobile money services to the low public awareness on the payment transfer system. As a result of this, experts have stressed the need for improved awareness.

In addition, banks and other mobile money operators have also been advised to significantly increase their investment in mobile money technology so as to encourage more users of that means of money transfer.

A Lagos-based research and consulting firm, Ciuci Consulting in a separate report showed that Safaricom invested over $30 million into M-Pesa, Vodacom spent $25 million, while MTN Uganda invested about $10 million in its initial investment in that space.