The number of registered mobile money accounts per 1,000 Nigerian adults rose by 18.1 percent within a year, according to a new report by the International Monetary Fund (IMF).
The report showed that mobile money accounts increased to 225.9 in 2022 from 191.0 in 2021. The number of mobile money agent outlets per one thousand kilometres square also grew to 1,618.6 from 680.9.
The value of mobile money transactions as a percentage of the GDP grew to 16.11 percent from 8.74 percent.
“The means to access finance have been rapidly changing in recent years, with traditional financial access points such as ATMs and bank branches gradually declining while non-traditional access points such as retail agents and mobile money agents are growing rapidly,” the report said.
It said in middle-income economies, the number of retail agents and mobile money agents combined more than doubled between 2019 and 2022 while the number of ATMs and bank branches declined by nine percent over the same period.
“The continued growth in access points to digital financial services has naturally been accompanied by an increase in their usage, as measured by the number and volume of digital financial transactions.”
Chinasa Collins-Ogbuo, director at Inclusion for All Initiative, said there is a high mobile phone ownership/access within the rural and marginalised groups which makes mobile money accounts easy to adopt and it is the fastest route to formally include them in formal financial services.
“If mobile money agents are in their communities, it addresses the distance to banks barrier that typically precludes access to formal financial services for these groups. Mobile money also enables their dependency culture as they’re able to reliably receive financial support from relatives in urban locations,” she added.
The IMF’s report is a unique supply-side dataset that enables policymakers to measure and monitor financial inclusion and benchmark progress against peers. Launched in 2009, it is based on administrative data collected by central banks or financial regulators from financial institutions and service providers.
Mobile money agents, widely described as ‘human ATMs’, are third-party retail outlets contracted by financial institutions to process clients’ transactions. They are empowered to reduce reliance on over-the-counter transactions while providing convenient personalised services.
The agents are equipped to carry out services that include account opening, cash deposits, airtime purchases, bill payments, withdrawals, and money transfers.
Globally, agency banking is recognised by policymakers, researchers, and development agencies as a financial inclusion initiative that has remained an integral tool in developing economies, particularly in the areas of poverty reduction, employment generation, wealth creation, and improving welfare and general standard of living.
The Central Bank of Nigeria in 2012 adopted the National Financial Inclusion Strategy, which was built on four strategic areas: agency banking, mobile banking/mobile payments, linkage models, and client empowerment.
And in 2018, the apex bank set up the Shared Agent Network Expansion Facility (SANEF) to recruit, train and support more people to become agents. The facility also provides funding to companies, incentivising them to expand agent networks in underserved cities across the country.
Data from the SANEF show that the number of bank agents surged to 1.3 million in 2022 from 83,500 in 2018.
A recent report by the GSM Association noted that global mobile money accounts grew by 13 percent in 2022 thanks to regulatory changes in SSA, particularly in Nigeria and Ethiopia.
It said registered mobile money accounts rose to 1.6 billion from 1.4 billion in 2021.
“Some of the key contributors to the growth of mobile money in the past few years have been regulatory changes in large markets,” Mats Granryd, director general at GSMA, said.
He said in Nigeria, for example, new licenses have seen many new mobile money players emerge, and with this a 41 percent growth in the number of registered agents.