NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, September 10, 2014

When the Central Bank of Nigeria (CBN) launched mobile money service in 2010, many industry observers believed the country held all the aces to become a dominant player in the African market.

With only 25 million bank accounts out of a population of 167 million people, and about 129 million active mobile phone subscriptions, it is understandably rational for them to have such weighty expectations. But four years after the introduction of service in Nigeria, Africa’s largest economy by Gross Domestic Product (GDP), the service is yet to catch on with the masses.

A recent poll by the Nigerian research company, NOI, shows that only 6 out of 10 Nigerians are aware of the service (59 percent), and of that number only 13 percent are actually using it. Even more disheartening is that 93 percent of the mobile money adopters are using the service in conjunction with an existing bank account. The remaining 7 percent had a bank account, but operated it separately. What this means is that the target audience—the unbanked—is missing out completely in the grand scheme of things.