Mobile money could extend financial services to about 23% of Nigeria’s overall population of more than 200 million people. This is according to Gail Warrander, Economic Development Team Leader, Foreign Commonwealth and Development Office (FCDO) Nigeria.
Gail disclosed this at the Economic Intelligence Unit webinar hosted today to discuss research conducted on the theme: “Fintech in Nigeria: State of Play.”
Facilitated by sponsors including Mastercard and MTN, the event took place virtually and featured discussions by two separate panels of financial and telecom industry experts.
Present at the event were Dr Babatunde Obrimah, COO Fintech Association of Nigeria; Dr Armstrong Takang, Special Adviser to the Honourable Minister of Finance; Usoro Usoro, General Manager Mobile Financial Services MTN; and Ngozi Megwa, Mastercard Senior VP Digital Partnerships, Middle East and Africa.
Patrick Akinwuntan, MD Ecobank Nigeria and Musa Jimoh, Director Payment System Management, CBN as well as Deoye Ojuroye, CFO of Providus Bank and Toki Mabogunje, President of Lagos Chamber of Commerce and Industry also attended the webinar.
Mobile Money Identified as Key to Driving Financial Inclusion
FCDO Economic Development Team Leader, Gail Warrander explained that mobile money is crucial to expanding financial inclusion in Nigeria.
Currently at 50%, Nigeria’s financial inclusion rate has only increased by 3% since 2012. We did some modelling with Boston Consulting Group (BSG) recently and worked out that mobile money could add 46 million people to Nigeria’s Financial system.
Gail Warrander, FCDO Economic Development Team Leader
“It could boost Gross Domestic Product (GDP) by 12% and create 3 million jobs,” she added.
Although Nigeria has over 200 million mobile subscriptions, less than 6% of Nigerians use their handsets to transact using mobile money, according to the World Bank.
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This is mainly due to strict regulations by the CBN around mobile money licenses and Payment Service Banks (PSBs). Part of the regulator’s PSB guidelines demands that telcos register a subsidiary and set up a N5.35 billion capital base before they can be awarded a licence.
Nigeria’s largest telco, MTN was granted a mobile money licence last year but has still been unable to secure a PSB licence.
However, Gail revealed that after obtaining a PSB licence in August, 9mobile has today launched its 9PSB mobile money service. This would help improve access to financial services especially in rural areas and unbanked locations, as CBN’s policy mandates PSBs to operate mostly in these areas.
9PSB’s *990# USSD code will enable users to perform financial transactions from the comfort of their phones. Most rural dwellers use feature phones and therefore will easily be able to access these services.
Usoro Usoro, General Manager Mobile Financial Services MTN agreed with Gail that mobile money services by MTN as well as other telecom companies would increase financial inclusion in the country.
It would also be helpful that other players are brought in so that we can all work towards driving down the exclusion rates. We believe we can all work together to address that.
Usoro Usoro, General Manager Mobile Financial Services MTN
Fintechs Are Moving Beyond Payments to Mobile Lending Targeting SMEs
Nigerian fintechs are expanding beyond payments and remittances into mobile lending products aimed at providing loans to small and medium-sized businesses, according to a research by the Economist Intelligence Unit (EIU).
EIU Senior Editor Thought Leadership, Europe, Middle East and Africa (EMEA), Melanie Noronha made this known during discussions at the Mastercard fintech webinar.
We are seeing that payments and remittances are the most developed sub-sector, but Nigerian fintechs are branching out of payments into mobile lending targeting SMEs and retail businesses.
Melanie Noronha, EIU Senior Editor Thought Leadership EMEA
“We are seeing increased engagement from mainstream banks as well,” she added.
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While the majority of Nigerian fintechs including Paystack, Flutterwave and Chipper Cash are focused on payments and remittances, a new set of fintech startups in the country, such as Lagos-based Carbon, are mainly offering credit lending services to both individuals and small businesses.
The gradual shift to mobile lending by fintechs could be attributed to the fact that many SMEs prefer patronising fintech lending marketplaces for loans, which mostly do not require collateral and are generally faster to obtain, as credible alternatives to banking loans.
EIU projects that Nigeria’s Fintech revenues could reach $543 million by 2022.
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