NIGERIA: First mobile money system aims to create Africa's biggest cashless economy

Record ID: 235343

  • Title: NIGERIA: First mobile money system aims to create Africa's biggest cashless economy
  • Date: 1st November 2011
  • Summary: LAGOS, NIGERIA (FILE) (REUTERS) VARIOUS OF TRADERS IN THE MARKET MARKET NEXT TO BUSY ROAD
  • Embargoed: 16th November 2011 12:00
  • Keywords:
  • Location: Nigeria, Nigeria
  • Country: Nigeria
  • Topics: Communications,Economic News
  • Reuters ID: LVA7QST8GC69DHDQU6EIMBCLK0B8
  • Story Text: Nigeria is set to become Africa's latest country with a mobile money system in a move analysts say could transform personal and business banking in the country.
    Following the lead from Kenya and South Africa, Nigeria's central bank is set to introduce the new system later this year after trials held across the country.
    The scheme that will allow Nigerians to transfer money and pay for goods using their mobile phones aims at turning Nigeria into a cash-less economy.
    Currently as many as 65 percent of people don't own a bank account. Most rely on carrying wads of notes around. Something supporters of mobile banking say increases the chances of theft, corruption and fraud.
    "A lot of people carry cash around, they believe in that cash, if they don't see that cash there is problems, so they (will have) trust and make sure that this thing works," said Oluwadare Owolabi, founder and chief executive FETS, one of the 15 companies licensed by the central bank to operate mobile money.
    Nigeria has a population of over 150 million people and nearly 89 million are mobile phone subscribers which has made it very attractive to various financial companies and investors in mobile banking.
    In preparation for the new system the central bank has embarked on numerous workshops and conferences with people in the financial and telecom industry.
    Paga, a Lagos based financial company, is another company licensed to operate mobile money business. Tayo Oviosu, co-founder and chief executive of Paga says he believes the new system could transform Nigeria.
    "I really do believe that the kinds of productivity gains that we saw in the West when the computer came out, and then we saw a gains when the internet came out, are the kinds of gains we are about to see in Nigeria with products like Paga, is that it will change people's businesses," he said.
    Oviosu added that mobile technology will lower the cost of remittances in Nigeria as it will remove the need for physical presence to ensure timely and secure transactions to any part of the country.
    "Our goal is to have 15 million active customer base by 2015, and have 30,000 agents across Nigeria by 2015, we want to have an agent down the street for every Nigerian," said Oviosu.
    But despite the excitement caused by Nigeria's progress towards an era of mobile money, experts have warned that the country's financial landscape which has been riddled with money laundering and fraud could discourage most people from using mobile money.
    There are over 20 million bank accounts in Nigeria but few are active. Currently the majority of people would rather keep their cash at home where they can see it - a habit that some say will be hard to change.
  • Copyright Holder: FILE REUTERS (CAN SELL)
  • Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register