Why Nigeria must embrace mobile money and agent banking
Despite the rapid growth in many other emerging markets and the high penetration rate of mobile phones in Nigeria (60.4% of Nigerian adults), the uptake and awareness of Mobile Money and Agent Banking have been persistently low at 1% and 16% respectively according to the EFInA Access to Financial Services in Nigeria 2016 Survey.
Mobile money is an obvious channel for Nigerians at the bottom of the pyramid to use as they adopt financial services for the first time. Up to 25 mobile money Operators (MMOs) have been licensed since the launch of mobile money service in Nigeria in 2009. Despite this large number of MMOs, high mobile phone and SIM card ownership, mobile money uptake and usage is still low in Nigeria. The Central Bank of Nigeria (CBN) issued the Guidelines for Agent Banking and Agent Banking Relationships in Nigeria in 2013; and the Operating Framework for Super Agent in 2015 in its bid to deepen the uptake of mobile money and agent banking products. However, the uptake of mobile money and agent banking services remain low in Nigeria.
Low awareness, access and trust are some of the key obstacles affecting the uptake of mobile money in Nigeria. Awareness and understanding however remain important drivers of mobile money uptake and usage. Customers need to be fully aware of the mobile money service and understand how it could be beneficial to them. To ensure mobile money and agent banking services get the best visibility possible in Nigeria, operators need to consider a wide variety of marketing strategies and options.
Based on findings from the EFInA Access to Financial Services in Nigeria 2016 Survey, the fact that 73.4% of adults who have not heard of mobile money are prepared to use new technology shows an immense opportunity for mobile money and agent banking penetration in Nigeria. EFInA has therefore developed and engaged in different initiatives, working closely with financial services providers and the regulator to promote awareness, uptake and usage of these services in Nigeria.
Some of the low-cost options which have been identified for improving mobile money awareness in
• Word of mouth/confidence, which usually result from up-and-running platforms
• Liaisons/collaboration with community or market leaders
• Campaigns through Local Transport Systems e.g. slogans and pictures displayed in buses
• Mass awareness campaigns through market storms, road shows, use of branded items and leveraging on existing market clusters or the different associations
• Referral method (Loyalty): This could be effective as 41.5% of those aware of mobile money heard through family and friends
• Set up awareness booths at local festivals/fairs/community events
EFInA recently collaborated with the Central Bank of Nigeria (CBN) and financial services providers to conduct mass awareness campaigns in selected local government areas in the North. These awareness campaigns have helped the industry to deepen the understanding, uptake and usage of mobile money
and agent banking services in the campaign locations. Some of the impacts which have been reported include: Recruitment of over 500 new financial services agents; On-boarding of new customers on the mobile money wallets and banks’ financial products; Activation of financial services in Kiru community of Kano State which had no bank presence before the awareness campaign and; Positioning of financial services agents in locations where there is insufficient bank presence. We plan to conduct these campaigns in phases, as we make progress on these different collaborations and initiatives being implemented with stakeholders in the mobile money and agent banking space.
Henry Chukwu is a Programme Specialist – Agent Networks at EFInA, a financial sector development organisation focused on making the financial sector work better for the poor. He is a professional with a cross-functional background in Digital Financial Services (DFS), Inclusive products, Banking, Agent Networks, Project Management, Business Development and Operational Strategies.