Mobile money comes to Nigeria

THE SHARED cars that shuttle between Abuja and Kaduna, two Nigerian cities, carry more than passengers. For a fee they will also carry cash, says Odedele Olusanmi, a driver. On a typical journey he takes five packages, each holding around 20,000 naira ($55). Only two-fifths of Nigerians have bank accounts, which is why some send money this way. Yet an alternative could already be in their pockets.

In the past decade a mobile-money revolution has swept through much of Africa, enabling the unbanked to make transfers, pay bills and save. Half of the world’s 866m mobile-money accounts are in Africa, not counting services which need users to belong to a bank. But not many are in Nigeria, its largest economy and most populous country, with 200m people, where mobile money was used for transactions worth just 1.4% of GDP last year (compared with 44% in Kenya). Four-fifths of Nigerians have never heard of it.

Until recently, the Nigerian central bank did not allow telecoms firms to offer financial services, except as the junior partners of conventional banks. Elsewhere mobile operators had been in the vanguard. A mobile-money system needs agents to take in and give out cash—boots on the ground, not just bytes in the pocket. In the early stages telecoms firms, which sell phone credit in the remotest villages, can run these...

via The Economist: Finance and economics Business Feeds

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