Why Nigeria Needs M-Pesa Now

It’s pretty simple; Africa’s largest economy is losing N6 trillion to rural ignorance of mobile money, according to Venture Africa.

Mobile money transactions in Nigeria are said to be at a very low level in the rural areas: statistics show that the nation records about 93.5 percent or over N6 trillion lower than Kenya’s M-Pesa service which covers a large segment of Kenya’s rural economy.

A telling statistics from the Central Bank of Nigeria (CBN) revealed that the total value of mobile money operations between 2012 and 2014 was about N430 billion. This two-year total is lower than Kenya’s one year mobile money transaction by N6 trillion (93.5 percent).

Venture Africa reported that M-Pesa processes transactions worth $4.98 billion annually, which is about 17 percent of total registered mobile money accounts in Kenya, according to the United States Agency for International Development (USAID). This finding indicates that total mobile money transactions in Kenya come to about $29.29 billion annually.

Although Nigeria boast of a very large population, with mobile penetration at 130 million active subscribers and the nation’s Gross Domestic Product (GDP) the largest in Africa, majority of businesses in rural areas are still yet to sign up to using the mobile money service. This, however, is the total opposite in Kenya where M-Pesa is gradually becoming the preferred payment service.

Mr Abiodun Oyelekan who is the head of Lagos’ Fadama Farmers’ Association (FFFA) said banks had approached farmers in rural areas to create awareness on the importance and use of mobile money.

“But I have not subscribed because it is not yet popular and hardly is anyone using it,” he goes on to complain.

”So if I attempt to transact business with it, people would end up demanding cash.”

According to Venture Africa, industry watchers believe the situation arose because of the model adopted by the CBN, which gives banks the lead role in mobile money operations, though telecom companies have a wider reach in the rural areas with up to 500 more airtime retail outlets.