NIGERIA Invest in 2012-13 - Newsdesk Media

Driving growth through Mobile Money –
putting Nigeria on the fast track
Mobile banking, payments and
commerce is a proven source for
economic development and growth. Prateek
Shrivastava, managing director of Monitise
Africa, explains how Nigeria can take
advantage of it via a shared-services platform.
The introduction to the World Bank’s first
ever Global Financial Inclusion report opened
with the following words: “well-functioning
financial systems serve a vital purpose, offering
savings, credit, payment and risk-management
systems to people with a broad range of needs.”
The report looked at 148 countries’ financial
systems and painted a picture of financial
inclusion around the world as a patchwork
quilt, with developing markets lagging behind
high-income economies in many areas.
However, the authors noted: “there is
a bright spot in the expansion of financial
services in the developing world: the recent
introduction of ‘mobile money’”, citing the area
of greatest success as sub-Saharan Africa.
The Bank highlighted these figures
because of the transformative impact that
mobile banking has. For every 10 per cent
increase in mobile penetration rates, there
is a 0.8 per cent increase in a country’s gross
domestic product, the Bank has noted.
So, for a country like Nigeria, Africa’s
largest mobile market with almost 100 million
subscribers yet a market penetration rate of
only 60 per cent, the prospect of building
a flourishing network for mobile banking,
payments and commerce is attractive both to
the government and to business.
But delivering such a network is a
complicated matter, particularly where
traditional forms of banking are not present.
Challenges include the number of people with
a bank account (and those who actively use
it) versus those ‘unbanked’, plus the physical
infrastructure in terms of access and availability
to branches. According to the World Bank,
only 30 per cent of adults in Nigeria have a
bank account, while 13 per cent used mobile
money in the previous 12 months.
At Monitise, we believe there are three
vital ingredients to bringing financial
systems to unbanked people via mobile.
Firstly, it cannot be done without financial
institutions to provide infrastructure;
second, you need stable, proven technology,
and third, a network of agents must provide
on-the-ground access to services.
Monitise already provides its proven
technology platform to 15m customers of
over 300 banks across the world as well as
being the chosen mobile partner for Visa Inc.
and Visa Europe (both are shareholders of
London AIM-listed Monitise plc).
However, wherever we operate, whether
it is India or Indonesia, we know there’s no
perfect template for entering a market and
a top-down approach will struggle. What
works best is bringing a managed service
and a best-of-class technology platform
into a country and working with local
partners to customise it for local use.
In Nigeria, we are investing to bring our
proven technology and our agent network
in the country as a shared platform. Using
these two components, we are already helping
banks launch cost-effective “mobile only” bank
accounts and branchless banking services
targeted to reach out to new market segments.
+44 (0)20 7947 4300
www.monitise.com
@MonitiseGroup on Twitter
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We strongly believe that a safe,
secure, bank-grade, pay-per-click model
(as opposed to a large upfront capital
expense model) will help financial
institutions create mobile products
and services to draw more Nigerians
into the banking system.
We have already begun in Nigeria and,
in time, we expect the next World Bank
report on financial inclusion to paint
a much brighter picture.