The challenges of building and operating mobile money services in Nigeria
Innovation Forum
15 May 2012

EFInA hosted its quarterly Innovation Forum to evaluate and discuss the challenges of building and operating mobile money services in Nigeria. The Forum was attended by a cross-section of licensed mobile money scheme operators and industry stakeholders, that were seeking to gain valuable insights on how to overcome the challenges they are facing in launching mobile money services. The key issues identified by participants include: consumer awareness/education, agent network management, interoperability between scheme operators, connectivity to the telecom companies, network reliability, and shortage of industry experts.

The guest speaker was Susie Lonie; one of the creators of the M-PESA money transfer service in Kenya; and the co-winner of “The Economist Innovation Award for Social and Economic Innovation.” M-PESA currently has 19 million customers. Speaking at the Forum, Ms. Lonie noted that there are currently 123 live mobile money deployments worldwide, but less than 10% are successful so far.

She outlined some of the immediate activities needed for developing a viable mobile money ecosystem, based on lessons learnt from M-PESA in Kenya. As a first step, Ms. Lonie stated that, “Customer education is key for mobile money to thrive”. Also, because mobile money is a new industry, there is an absence of common terminology, which can cause confusion and misunderstanding; so it is essential that common terminology is adopted by all stakeholders in the mobile money industry.  She further added that, “Unambiguous regulations, clarification of the roles of operators and an effective agent network, are also needed to develop an enabling environment for the successful implementation of mobile money.”

Chief Executive Officer of EFInA, Modupe Ladipo noted that, “Mobile Money is key to furthering the financial inclusion agenda in Nigeria, as it enables the delivery of financial services at a lower cost to a wide range of income segments of the society”. Referring to the EFInA Access to Financial Services in Nigeria 2010 survey; Ms. Ladipo noted that, “Of the 49.2 million adults who own a mobile phone, 25.3 million are unbanked, which demonstrates the potential for using mobile phones as a distribution channel for providing financial services to the unbanked.”

In closing the Forum, all participants agreed that there was a need for a collaborative approach to addressing the challenges faced by operators in the mobile money industry. Ms. Ladipo’s concluding remarks were that, “EFInA will continue to assist mobile money operators to overcome these challenges by sharing best practices from successful mobile money operators’ worldwide, providing capacity building and establishing a working group to tackle common issues with one voice.”