CBN faults telcos on slow pace of mobile money penetration

By Amechi Obiakpu

The Central Bank of Nigeria (CBN) has faulted the impression that the inability of mobile money in Nigeria to achieve a higher success rate in the country six years after it was created was because it is bank-driven rather than telecom-driven. Rather, the apex bank said the telecom companies are more interested in brand penetration.

Compared to Nigeria, Kenya’s economy has achieved great success in mobile money service and has thus become a model for African countries to emulate. This has created the impression that the telcos with better infrastructures and huge financial backings could have done better jobs by taking the services to more Nigerians especially in the rural areas.

But the CBN through its Deputy Director, Banking and Payments System Department, Jimoh Itopa, said the issue is not because mobile money is not telco-driven but that more work needs to be done to sell mobile money service to more Nigerians.

Itopa said CBN at the outset of mobile money project had various meetings with telecoms operators in the country and the impression it got was that they are more interested in brand penetration as against the real target of product-driven.

Itopa made the statement at the 4th Annual Brands and Marketing Conference organised by Brand Journalists Association of Nigeria (BJAN) at the Chartered Institute of Bankers of Nigeria (CIBN), Victoria Island, Lagos, on Friday. He spoke on the theme, ‘Evolving a Sustainable Legal Framework for Mobile Money in Nigeria’.

“People ask why the telcos are not leading mobile money in the country, my answer to them is simple: There is no banking transaction in the country without leveraging on the telcos,” Itopa said.

“There is no financial institution that does not rely on telecommunications operators. They have been recognised to play active role in the ecosystem and, if they shut down now, the system will crumble.

“The thing is that telecommunications operators want their brand identities to be visible – for their brand colour to be visible. People should note that, there is no monetary gain in mobile money except in volumes, even the operators cannot say they are making huge money from it,” he said.

Recounting on the circumstances that led to the creation of mobile money service in the country Itopa averred that a report by the World Health Health Organization (WHO) in 2009 stated that 50 percent of the world population was poor.

According to him, the report made the apex bank to fashion out a legal framework for mobile money by seeing how to increase banking participation by 50 percent especially among the people. About the same time, he said Nigerian Communications Commission (NCC) had recorded over 100 million Nigerians with mobile phone. This, he said was the basis for the birth of mobile money in 2010.

Itopa said: “The mobile phone infrastructure was identified as a practical strategy for financial inclusion by the CBN, hence the development of a regulatory framework for Mobile Money Services in Nigeria in 2009. This was in response to the dictates of the PSV2020 document which emphasised on displacing cash in favour of electronic channels for payments, anchored on National utilisation and international recognisition.

“With the implementation of the framework, the inadequacies were brought to the fore, hence its review in 2015. This also resulted in the issuance of Guidelines on Mobile Money Services in Nigeria in March, 2015.”

Itopa noted that the objective of the regulatory framework is to provide an enabling environment for mobile money services in reducing cash dominance in the Nigerian economy. To achieve this, collaborative roles have been assigned to the NCC and the Nigeria Deposit Insurance Corporation (NDIC). While NCC issues short codes and type approves telecommunication equipment to be used by Mobile Money Operators, NDIC recently approved pass through deposit insurance for mobile money subscribers.

Although there are still challenges in reaching the unbanked especially people in the rural communities, he attributed the development to lack of proper education and infrastructural deficiencies. He, however, said the method is being adopted to drive mobile money service to the Nigerian populace in the coming year.

According to the CBN chief, “The growth of mobile money services is set to be one of the most significant trends of the coming years. With the advancement of technology and the expansion of mobile money ecosystem, mobile phones are becoming a multi-purpose payment platform.

“Mobile money transactions across the globe will transform the world of finance and the world of mobile. It will change human’s lives with increased convenience, enhance the standard of living for the unbanked population and stimulate economic development.

“The Central Bank of Nigeria on its part will live up to its billings in promoting a safe and efficient payment system.”


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