DiutoCoinNews

Bitcoin, Cryptocurrency News in Nigeria And Africa

FEATURES NEWS

Blockchain Will Help Nigeria to Achieve Financial Inclusion Through Mobile Money Services.

Share this:

Ab initio, money mobile services started with Kenya’s M-Pesa. It is widely adopted in Kenya via M-Pesa and now, in over 30 African countries.

Mobile money has bridged the financial inclusion gap for over 66 percent of adults in Sub-saharan Africa who have no access to traditional bank accounts. 

Mobile money have made it possible for majority of the unbanked to make money transfer, save, borrow or even pay for goods and services.

The mobile money service market recorded a huge success in Kenya through M-pesa which has now penerated every African market. It has enabled businesses and individuals to connect without a traditional banking number, generating millions for the fintech industry. 

For example in Nigeria we have over 10 million persons making money transfers without a bank account. These services are made possible through mobile mobile agents which is common with fintech platforms.

In Nigeria, according to a report jointly released by the Microfinance Information Exchange and MasterCard Foundation, about 80 million Nigerians do not have access to financial services. 

As at 2018, mobile money transactions in Kenya stood at $38.5 billion via the data released by the Central Bank of Kenya. Around 83 percent of Kenyans now have access to financial services, mostly through M-pesa mobile money service. 

Coming to Nigeria, the story is not the same. The first mobile money service in Nigeria dates back to 2009. Since then, a dozen new mobile money service providers have emerged with Paga currently, topping the list. 

Currently, about 90 percent of adults in Nigeria claim they have a mobile phone and a SIM card, yet the mobile money services is not growing.

There are over 21 licenced mobile money service providers in Nigeria now. This includes mobile network service providers who have a large share access to offering mobile services to the unbanked but yet it is not working.

See Also: Top Nigerian Banks Looking to Take Over the Fintech and Digital Currency and Payment Space in Nigeria

While mobile money transfer have so far worked in most African countries like Rwand, Kenya, Uganda, Tanzania etc. It has failed in Nigeria. The Central Bank of Nigeria had introduced the Bank Verification Number policy in 2016 to help trace transactions and create trust but it didn’t work.

The policy required every Nigerian who owns a bank account to link their biometric details with their bank account. This was introduced by the government to allow them trace every transaction carried out in Nigeria easily. 

But this also failed to go mainstream even with the creation of BVN lite for rural areas. This made Nigerians to distrust the financial sector, with many abandoning their savings out of fear of being interrogated.

Experts predict that the mobile money market will grow at a compound annual growth rate (CAGR) of 25.6 percent to reach $73 billion by 2025. While the mobile wallet segment, is also expected to grow at a CAGR of 25.7 percent between 2020 and 2025.

See Also: While Less than 30 percent of Nigerians Have Social Media Accounts, How Many Has Bitcoin Wallets?

Paga is currently the leader in mobile money services in Nigeria with over 8,000,000 users, which is small given that Nigeria is the most populous country in Africa.

How Will Blockchain Help Mitigate the Issue:

Most experts, believe that blockchain will help streamline mobile money services in Nigeria and achieve financial inclusion in the country. 

There is this trust issue with bank whereby users are afraid of delay in bank transactions and other issues of unknown bank withdrawals including delays in access to bank transaction statements. 

Additionally, using blockchain will help create reassurance that all transactions can easily be traced by the owner and know what and why the transaction hasn’t gone through.

Most people leaving in the rural regions still prefer to use cash transactions due numerous bank issues. Fintech service providers can utilize blockchain to encourage even the urban users to utilize mobile money service mostly in remittance services and other banking service. 

It will allow more mobile money agents to apply for the agent service, once there is an easy, faster and trustworthy means of tracking transactions to help him work well with his customers because only him can assure his customers that the are safe. 

Mobile service providers can leverage on blockchain technology together with mobile money agents and the telcom industries in other to help them provide trustworthy, transparent and faster transactions to achieve financial inclusion in Nigeria.

Using blockchain will fill the trust gap where BVN failed and delay in bank transactions. Working with mobile agents will bring payment processing services spots nearer to the rural areas. 

While utilizing the wider reach of the telcom industries will help to reach a large number of the unbanked persons in Nigeria to achieve financial inclusion in the long-term.

Register on Binance
Register on Binance

Register On Binance

 

Copyright DiutoCoinNews

All rights reserved. This material and any other digital content on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from  DiutoCoinNews.

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
Diutocoinnews Admin. Send all publications to info@diutocoinnews.com.ng
0
Would love your thoughts, please comment.x
()
x