NIGERIA SEES DECLINE IN BANKED ADULTS THANKS TO MOBILE MONEY ROADBLOCKS

NIGERIA SEES DECLINE IN BANKED ADULTS THANKS TO MOBILE MONEY ROADBLOCKS

Despite being home to Africa’s biggest mobile phone market, Nigeria is seeing a decline in banked adults in the country.

According to a report in Bloomberg, financial inclusion in the African country has declined close to 4 percentage points from 2014 to 2017, now standing at 39 percent at the same time that the Sub-Saharan African average of banked people increased more than 8 percentage points to 43 percent. The government in Nigeria has prevented network operators from applying for mobile money licenses that will enable consumers to make cash transfers without having a bank account. That has led to more people in the country becoming unbanked. Bloomberg noted that earlier in July, the Central Bank of Nigeria said it won’t meet its target to increase financial inclusion to 80 percent by 2020 and is currently reviewing a new path. The Central Bank of Nigeria has inked an agreement with the Nigerian Communications Commission to expand mobile phone-based financial services, noted the report.

In Kenya 73 percent of people use mobile money — compared to under 6 percent in Nigeria, noted Bloomberg, citing data from the World Bank. “We’re taking baby steps when we should be running,” Yomi Ibosiola, an associate director at Deloitte Nigeria’s data analytics practice, said in an interview with Bloomberg.

According to the report, one of the obstacles Nigerians face is the fact that in order to make payments on a mobile phone, they need a Bank Verification Number — and since the goal is to reach the unbanked, infrastructure has to be deployed to address that issue. To overcome that, the government in Nigeria is gearing up to issue identity numbers to 70 million people in the country by the end of 2019 and is bringing all of its identity verification systems into one database which will make it easier for people in Nigeria to access mobile financial services. Another problem in Nigeria is that people aren’t offered enough incentives to open a bank account. That is particularly true among the poor in Nigeria. “You have to create a ‘pull’ to these accounts and that happens when those accounts are meaningful to people’s every day lives,” said Ameya Upadhyay, a principal in the investment team of Omidyar Network Fund Inc., which has invested in Pagatech, a Nigerian mobile-money startup. “People don’t eat accounts.”

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Nigerians in South Africa
Nigerians in South Africa 1585 posts

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