There are nearly 170 million active mobile phones in Nigeria, the highest number in Africa and seventh in the world, but the country still lags behind Kenya, which only has 28 million active mobile phones, in the usage of mobile money.

While Nigeria reports about N5 billion ($25.1 million) in annual mobile money transactions, the East African nation boasts of about $30 billion annually. M-Pesa, the mobile money platform of Kenya’s Safaricom alone accounts for about $5 billion of this sum.

Mobile money adoption rate in Nigeria is very low — about 2 percent. This is partly due to the approach adopted by Nigeria’s central bank which is in charge of giving out mobile money licences. Mobile money in Nigeria is bank-led unlike Kenya’s telco-led.

Mr Ike Eze, who is responsible for PocketMoni, the mobile money business of financial switching and mobile money company eTranzact, said in an interview with Ventures Africa last month, that the major hindrance to the growth of mobile money in Nigeria is the exclusion of telecommunications operators from mobile money licences.

“… if you look at how mobile money has permeated other societies, it typically has been on the back of an agent network built by a telco. There are already agents in so many places, both urban areas and rural areas … So piggybacking money on top of something like that makes it easy,” he said.

Mr Eze, who is also eTranzact’s executive director for strategy and corporate development added that since Nigeria’s telcos are not allowed to own mobile money licenses directly, the country needs to find out better ways to improve adoption. The Director, Banking Supervision of the Central Bank of Nigeria (CBN), Dipo Fatokun could not agree more. He admitted on Sunday that mobile money services which started in the country about two years ago with 21 mobile money operators had not met the CBN’s target.

According to Fatokun, the CBN discovered that the growth of mobile money has been hampered by the lack of agency. He explained that “for mobile money to be successful, you must have an agent”.

While the apex bank has not changed its stance on not licensing telcos, it is offering them a super-agent status.

“Two of the telecommunication companies already had our approval in principle, to make their agents available for mobile money,” he told the News Agency of Nigeria (NAN) while delivering a paper with the theme Cybersecurity: The Need for Standards, at the Nigeria Electronic Fraud Forum (NEFF) in Lagos.

Mr Eze sees light at the end of the tunnel for mobile money in Nigeria. However, he reiterated that “in the absence of telcos, you have to rethink how you are going to operate the market”.

Watch out for Ventures Africa’s interview with Mr Ike Eze, eTranzact’s executive director for strategy and corporate development.

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