Sometimes, we implement certain economic policies that we think will help the poor but that end up disadvantaging them. One such policy is how we decided to handle the issue of Mobil Money and the Cashless Banking initiative. We decided that it should be led by banks. Thread...
The thinking was that it will encourage more people to open bank accounts and use debit cards and point of sale machines. Problem is that in many remote villages, there are no banks and no POS machines. When the only bank in my village was robbed, economic activities stalled.
The result is that today only 6% of Nigerians use Mobile Money. Compare this to 73% in Kenya where, with Mpensa you can get dollars from abroad in 5 minutes using PayPal. Kenyans use Mpensa to pay for virtually everything, including cutting your hair at the barber’s.
You see, Kenya drove their Mobile Money initiative through Telcos, not banks. Thankfully, the Central Bank of Nigeria’s Digital Financial Policy of 2018 reversed this policy to put Telcos in the driving seat. This should encourage wider financial inclusion for the poor.
I was, therefore, very pleased to learn that @MTNNG is about to launch its mobile money service called ‘Momo.’ I worried about how people that don’t have bank accounts will get cash and was informed that they are appointing 15,000 agents across the country that can give you cash.
This will have the dual effect of creating thousands of jobs and also make it easier for the unbanked and rural dwellers to be financially included. While only 40% of Nigerians have bank accounts, there are 146 million active GSM lines in Nigeria, many of them on smartphones.
Well done @MTNNG. I look forward to trying out the ‘Momo’ service soon. The scheme will also enable a number of young, unemployed people to get jobs. The task of job creation is not only for government or through the formal sector like banks. The new CBN policy is progress. End!
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