Factors affecting the adoption of Mobile money in Nigeria

Posted by Felix Okoli on Friday October 25, 2013 at 9:53:10:

In a country like Nigeria, the use of mobile money has not yet been wide spread. The number of people using mobile money in Nigeria is very few compared to the number of people who have mobile phones. As of 2012, the percentage of individuals using mobile money was said to be only 32% of the whole population, and this is very poor, when looking at the benefits of mobile money.

This article would discuss the different factors that limit the use of mobile money in Nigeria and the solution to such problems.

FACTORS OR PROBLEMS THAT LIMIT THE USE OF MOBILE MONEY IN NIGERIA includes:
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- LITTLE OR NO AWARENESS: The number of people who do not know much about the existence of mobile money transactions in Nigeria are many. The awareness been created for the existence of mobile money in Nigeria is not much. A lot of people in the especially those in the rural areas are not even aware of the concept of mobile money, so how would they queue in when they don’t even know what the concept is all about?

- MOBILE MONEY PAYMENTS ARE NOT ADOPTED BY MOST MERCHANTS: This means that the number of vendors who accept mobile money as a means payment for their goods and services are few in Nigeria. Most sellers and vendors prefer cash or cheque as a medium for payment. This limits the use or need for mobile money, unlike what is obtainable in the Developing countries where virtually all goods and services are paid for with the use of mobile money.

- FEW MOBILE MONEY AGENTS: Mobile money agents are people who help you load or deposit funds in your mobile money account. The number of mobile money agents in Nigeria very few. In a country like Nigeria with a population of over a 100 million, there are less than 5,000 mobile money agents in the country. This limits those who may wish to fund their mobile money accounts in order to make a transaction

- NETWORK PROBLEM: Mobile money in Nigeria is been operated between the user and the mobile operators(MTN, GLO, Airtel and Etisalat) and such transactions take place via SMS or mobile internet. An inefficient network service can hamper the effectiveness of mobile money transactions.

- NO INTEREST ON MOBILE MONEY ACCOUNTS: Most mobile money accounts in Nigeria don't attract any interest rate so people see it as a fund that is only meant for spending money rather than saving it. It is not a good store of money for the long term and especially in an inflationary economy

- FEES ASSOCIATED WITH USING MOBILE MONEY: Perhaps, one of the reasons why people who know about mobile money don't totally adopt the service is as a result of the many fees associated with using the service. Apart from being able to top up airtime for free and conveniently, mot other services such as bill payments and cash withdrawals tend to carry fees which people would rather avoid. I mean, why do they have to pay a fee for taking cash out of their mobile money account?

- AVAILABILITY OF EFFICIENT BANKING SERVICE:
Nigeria has a lot of banks with a lot of branches in cities and even villages and close to where people reside. Most of the services which mobile money offers are also offered by banks and this makes it hard for mobile money operators to operate when customers know they can get the same service from their banks. Besides banks also offer mobile banking option which is still growing.

These are the few factors limiting the usage and growth of mobile money in Nigeria.

SOME SOLUTIONS TO THE PROBLEMS LIMITING MOBILE MONEY IN NIGERIA
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- CREATE MORE AWARENESS: Awareness on the benefits derived from the use of mobile money should be create in the country , especially for those people who reside in rural or less developed areas of the country. Such awareness can be created via –Sending Bulk SMS by Network providers, bill boards and handbill, discount on transactions etc

- ENCOURAGE VENDORS TO INCORPORATE MOBILE MONEY IN THEIR TRANSACTIONS: Vendors and sellers of goods and services should be encouraged to incorporate mobile money transfer as a means of payments for their services. Especially those running e-commerce stores. This would encourage more people to start making use of mobile money in their transactions.

- MORE PEOPLE SHOULD BE ENCOURAGED TO BECOME AGENTS: With more agents around, more people would be encouraged to fund and make use of mobile money

- COMBAT NETWORK PROBLEMS: Network providers should work on making their network good and faster .It would encourage more people make their transactions faster with mobile money.