Mobile money: Limited network coverage, low literacy hindering penetration – Expert

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By Funmilola Gboteku

An Information and Communication (ICT) Expert, Ahmed Ogundimu, says limited network coverage and low literacy levels are among factors hindering mobile money penetration in rural areas.

Ogundimu, who is a Senior Product Manager with Amazon, told the News Agency of Nigeria (NAN) on Saturday that another challenge was skepticism about digital financial services.

He said that infrastructural deficit, which included inadequate internet access, remained a major plague faced by operators in the mobile money market in the country.

Ogundimu said that coupled with these were other logistical issues that worsened the operation of mobile money in Nigeria, adding that these challenges had further widened the financial inclusion gap.

“Nigeria does not have adequate access points to financial services, making only about 23 per cent of poor Nigerians living in rural areas within three miles of such access points.

“Also, low quality of mobile phone service in Nigeria makes users constantly complain of low quality of services, such as glitches in transactions and the issue of recurring network interruptions,” he said.

Ogundimu noted that a lot of people in the rural area were excluded financially because they do not have adequate knowledge about mobile money.

To resolve these challenges, Ogundimu said that it was necessary for mobile money providers to expand their rural agent networks and offer more localised and user-friendly services.

He explained that to sell mobile money services to people in rural communities, operators needed to consider the necessity of advertising these products in the local languages of the different communities they intended to operate in.

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Ogundimu added that to aid non-literate users, services could be sold to them using familiar images.

“Government and non-governmental initiatives aimed at promoting financial literacy and digital inclusion should be organised to contribute to the gradual penetration of mobile money services in these regions.

“The Nigerian government can also play a key role in expanding financial inclusion in rural areas. This can be done by providing incentives to financial institutions to establish and operate branches in rural areas,” Ogundimu said.

The ICT expert urged the government to invest more in telecommunications infrastructure for seamless transactions, saying it would go a long way in improving network issues.

He, however, stressed that the expansion of the digital financial service could not be overlooked as could be seen by the growth and acceptance of mobile money.

Ogundimu said that, according to an IMARC Group’s 2023 report, the Nigerian mobile money market was projected to expand at a compound annual growth rate (CAGR) of 26.37 per cent between 2024 and 2032.

“Also an EFInA report published by Bloomberg reported that 52 percent of adult Nigerians have a bank account.

“The ease of use, accessibility, and convenience offered by mobile money platforms through USSD (Unstructured Supplementary Service Data) and mobile wallets have also played a crucial role.

“Also, supportive regulatory frameworks and initiatives by the Central Bank of Nigeria, such as the licensing of Mobile Money Operators (MMOs) and tiered Know-Your-Customer (KYC) requirements, have encouraged the growth of mobile money services,” he said.

According to Ogundimu, it is evident that the industry has generated significant employment opportunities and empowered individuals, though estimating the exact number in Nigeria is challenging.

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He said that jobs created in the industry included direct employment by mobile money operators, agents, and vendors facilitating transactions.

Ogundimu added that there were indirect jobs created in related sectors such as telecommunications, software development and financial services.

“The ecosystem surrounding mobile money has not only created jobs but also bolstered entrepreneurship, as many individuals now operate small businesses as mobile money agents, thereby gaining financial independence and contributing to the economy,” he added.

On criminality in mobile money business, he said that while mobile money had brought significant benefits, it was crucial to acknowledge the potential risks.

According to him, instances of fraud, scams, and money laundering attempts have occurred.

He added that a notable case was that of a telecommunication company that sued 18 Nigerian banks over a 53 million dollar mobile money fraud in 2022.

Ogundimu stressed that this underscored the importance of collaborative efforts between stakeholders, regulatory authorities and mobile money providers to continually enhance security measures.

“The safety and security of mobile money users should be a top priority for all involved parties.

“Security measures should include robust authentication processes, secure technology infrastructures, KYC enforcement, transaction monitoring, and public awareness campaigns about safe mobile money practices,” he said. (NAN)

Edited by Christiana Fadare

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