Editor’s Note: At the World Economic Forum, MasterCard CEO Ajay Banga led a public session on Inclusive Growth in the Digital Age. We are hosting an Inclusive Growth series on our blog, inviting others to share perspectives.
Grameen Foundation Explores Ways the Struggling Sector Could Reach its Potential
As the largest among the fast-growing economies of Africa, Nigeria is a promising market for mobile financial services. More than 80 percent of adults have access to a mobile phone and over 20 licensed operators provide services. Yet mobile money has not taken off as expected, though almost 57 percent of Nigerian adults (50 million people) have no access to formal financial services. According to a Financial Inclusion Insights study, only 0.1 percent of Nigerian adults actively use mobile money.
The low rates of banking participation are not due to a lack of interest. In fact, 84 percent of those who have never had a bank account report that they would like one. So what accounts for this disconnect?
New research conducted by Grameen Foundation, in partnership with the MasterCard Center for Inclusive Growth, shows that user experience is a major factor in the stunted growth of mobile money services, especially among poor users with limited or no formal banking experience. Our study found that many were unaware of the services or had limited access to agents. Some were turned off by inflexible terms and high fees, while others simply didn’t trust the system.
We believe there are some key steps operators can take to increase the adoption and continued use of these services:
- Understand your audience and market to them in local languages and through social and cultural networks using non-technical terms and images.
- Give better support to your agents by providing training, access to capital and advertising and professional support.
- Design your products for your customers by providing the lowest possible barriers to entry and being as flexible as possible.
In Nigeria, we believe uptake will increase when a wider range of users begin to perceive the services to be targeted at them, easy to access and use, helpful to their financial lives, and trustworthy.
You can download the full report here.
This blog is adapted from a post that first appeared on NextBillion.