Mobile money service can help banking access'

There is compelling need for financial services firms to explore mobile money services in order to reach out to more unbanked Nigerians.

Emmanuel Okoegwale, principal consultant at MobileMoneyAfrica, a mobile money services company, said the challenge of rolling out new branches has made it imperative for banks to explore the new channel.

"The prospect for mobile financial services is significant in a country like Nigeria where only 25 million of the 70 million adult population have access to banking services," Mr Okoegwale added. He said the infrastructural needs to roll out mobile money lies with the mobile network operators despite the fact that the licences were issued to financial institutions and independent providers only.

He said the mobile payment regulatory framework issued by the Central Bank of Nigeria (CBN) which has been in use in the last 24 months does not adequately spell out liaison between the Nigeria Communications Commission (NCC) and the CBN on enforcing compliance by the network providers. "Post licencing period will expose some of the land mines in the regulatory framework and potential lapses but since no framework is carved in stone, I believe the regulator will take note and ensure positive changes."

He expressed concern about enforcing certain aspects of the framework on the Mobile network operators through the NCC. ‘'How do you force MTN for instance, to open its network for independent providers when it already has its preferred partners''? Already, the Central Bank has issued licenses to 16 firms to operate in the mobile money business.

Jibril Aku, Managing Director, Ecobank Nigeria, said embracing mobile banking facilities will aid the gradual migration to cashless society and also reduce cost of cash handling. In a statement recently, Mr Aku said mobile banking payment solution will help bridge the gap between the over 64 million unbanked and the over four million under-banked Nigerian adults.

Pieter Verkade, MTN Executive of MobileMoney, said recently that it has reached agreement to introduce international mobile remittance services in the 21 countries where MTN operates. Nigeria remains MTN's largest market with subscriber base of over 20 million.

No role for Communication Commission

Reuben Morka, NCC's spokesperson said the commission has no real role to play in the sector as the CBN is the regulator granting the licences. "It is not our business to begin to regulate how banks relate with telecoms companies on this. We licence telecoms companies but banks are seeking solutions and they approach any company of their choice." The Central Bank in its framework for mobile payment services identified three models for the implementation of mobile payments services.

These are, bank -focused- financial institutions as lead initiator, bank led-financial institutions and non-bank corporate organisation. According to the framework, "The lead initiator shall be responsible for ensuring that the various solutions and services within a mobile payment system meet the entire regulatory requirement as defined by the Central Bank of Nigeria."

This framework makes banks legally responsible and accountable to the Central Bank of Nigeria and the end user.Enhancing Financial Innovation and Access (EFInA), a non-profit organisation promoting access to financial services for the unbanked and financial sector development said Nigeria lags behind South Africa, Botswana and Kenya in terms of the percentage of the population who are financially served. Its claimsin 2010 that, "the growth in financially served population in many of these markets is mainly attributable to their mobile money offerings."

Source:234next