A new report has identified bank-led structure, failure to leverage the growing subscriber base of the telecommunications industry and lack of clearly defined target market as major obstacles to the growth of mobile money services in the country. Agusto & Co. Limited, in a new report on mobile money services in Nigeria, said low awareness of mobile money services had further restricted the growth of the industry.
It said being bank-led, mobile money services had mostly targeted customers with bank accounts, adding that the unbanked had remained excluded from the service. “It can be argued that mobile money services have failed to grow as expected due to the bank-led structure and failure to leverage the growing subscriber base of the telecommunications industry, currently at 129 million,” said Agusto & Co. Quoting a recent report by NOI Polls, the company said 93 per cent of mobile money adopters used it in conjunction with their bank accounts while only seven per cent utilised the service separately.
“Furthermore, the absence of generally accepted proof of formal identification required to assist service providers navigate KYC (Know Your Customer) concerns, has been identified as a major deterrent to the success of mobile money operations in Nigeria,” the credit rating agency said. It said other factors included poor agent network and infrastructure and notably, the lack of inter-operability between mobile money agents, adding that the absence of inter-operability had restricted agents from serving customers from other providers.
It further said customers on different networks were also restricted from accessing different providers. Agusto & Co. however said that despite the challenges to the growth of mobile money services in Nigeria, the industry continued to attract interest with a growing number of strategic partnerships. It said among recent developments within the mobile money industry, Globacom’s Glo Xchange was expected to accelerate the mobile money revolution and financial inclusion in the country.
In addition, we expect telecommunications operators to play a bigger role in the expansion of the industry through synergies with mobile money agents,” said the Agusto & Co. It said heightened awareness and rising confidence in mobile money products would lead to a significant rise in mobile money services. “Mobile money services can serve as a major catalyst for driving the CBN’s cashless policy, create employment and deliver financial services at an affordable cost to the impoverished and low income earners.”