By CHUKWUMAH KELECHUKWU.
On the eve of last Eid-Fitri, Barrister Udo returned to Lagos from Calabar too late to meet up with banks’ operational period. The father of three had no sufficient cash in the house to meet family obligations during the two-day Sallah holiday.
The next day, he rushed to near-by Paga agent at Ibiye, Badagry Expressway, Lagos, to make cash withdrawals needed to run his family between Tuesday June 4 and Wednesday June 5 before banks could resume normal banking operations.
At the agent’s office, tens of customers queued up for cash withdrawals and transfers to relatives, a process made quite slow by intermittent network down time the agent blamed on Nigerian Inter-Bank Settlement Service (NIBSS), the transactions processor company.
But patiently, slowly network signal returned, transactions resumed and Udoh was relieved after getting the much needed cash. The lawyer said “Mobile money agents who make banking services available where no banks exist deserve better for this economy than a bundle of politicians put together.”
He said it was the second time of using the mobile money service at a critical moment. He disclosed that he had raised cash using mobile money agent in Ibilo, Akoko-Edo in Edo State during a recent trip to the agrarian community.
Ibilo is a sprawling agribusiness hub on the border town between Okene in Kogi State and Ondo State. In a town hosting a Federal Government College, a general hospital, and one of the biggest markets in Edo North Council – comprising Auchi, Igara, Ikakon and Onwa, there was no single bank despite the beehive of trade in garri, yam, egusi, and other farm produce.
InsideBusiness authoritatively gathered that the last signature of a bank in Ibilo was erased in 2010 after daredevil armed robbers blew up a branch of UBA in the town with dynamites carting away millions of naira and thereafter compelling residents to a 50 kilometre trip regularly to Okene or farther to Ondo State to get bank services.
Until recently after mobile money agents came to the town, each market day would leave residents and visiting traders with their hearts in their mouths over how to evacuate proceeds of business transactions or conveniently transfer cash to their destinations for business transactions.
Mobile Money Agents Gaining Wider Acceptance
As in Ibilo, hundreds of towns and communities across the country had been in the throes of financial exclusion. In Imo State, for instance, banks scarcely exist outside Owerri, the capital. Residents of heavily populated areas such as Ohaji, Egbema, Oguta and Agwa used to travel long distances with cash until lately when they embraced mobile money services.
Except in Orlu, Okigwe, Mbaise towns, large number of Imo residents had grown used to living without banks. And in Anambra, banking operations begin and end at the major cities of Onitsha, Awka, Nnewi, and few other towns with strong commercial activities and significant presence of armed military personnel to guarantee security.
Lagos State, the economic nerve centre of the country, has its share of the frustrations arising from the poor penetration of banking services beyond metropolitan cities. Many residents of Lagos suburbs are as financially excluded as those in rural dwellers elsewhere.
Today, the entire story has changed with mobile money agents making a kill by offering instant payment services where no banks exist. Thanks to the CBN whose single policy thrust has achieved vintage double: created employment for agents and brought most people otherwise excluded into financial services system.
During a recent visit to Agwa, our correspondent discovered that a couple of mobile money agents offering financial services had effectively filled the yawning vacuum created by non-existence of banks in the town which has over 300, 000 active youth population.
One of the Paga agents who didn’t want his real name mentioned told our correspondent that the patronage was quite impressive. Mr. Chris Okonkwo (not real name) said it was one of the best things that happened to him after he lost a contract employment with an oil company based in Delta State.
“Initially it was challenging. Over the three years period the business has stabilized as more customers, particularly traders coming to the local market from outside realised that we could facilitate electronic payments and receipts, other transactions for them,” said the agent.
The middle aged man disclosed that since he registered with Pagatech to operate as an agent, most of the local populace do come to him to facilitate payment and withdrawal transactions since there are no commercial banks in the town.
Our checks around Lagos suburbs reveal wider acceptance of mobile money operators as their agents effectively provide banking services outside metropolitan areas where banks don’t exist.
Largely visible in places visited were agents of Pagatech, FirstMorni, and eTransact.
Bridging Financial Inclusion Gap with Rise of Mobile Money
Mobile money is a secure payment service regulated by the CBN that enables operators to pay for goods and services, receive money, transfer money, buy airtime using mobile phone. It came into existence in 2012 to compliment the entire spectrum of the cashless policy of 2012 and help to realize financial inclusion target of the CBN.
As at the time, it was believed that about 55 percent of the population did not have access to formal banking and banking products, a fact envisaged could hamper success of the cashless policy of the CBN.
Consequently, with the increasing penetration of mobile phones it was realized that mobile money services could facilitate the reach of banking services to places outside metropolitan zones where banks are non-existent. Some of the key guidelines which the CBN set out required operators to, among other things, be issued a unique short code by Nigeria Communications Commission (NCC) that would be used as a unique identifier to carry out mobile payment services.
They are to be issued a unique schema code by the Nigeria Inter-Bank Settlement System (NIBSS) for managing interoperability, and get registered users to activate the service before any transaction can be made and approved based on the entire Know Your Customers (KYC) system.
It is in managing the system interoperability by NIBSS that poses serious challenge for operators and users as the system has become more erratic in recent times raising grave concerns among financial system stakeholders.
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