West Africa’s banking agents more than double in one year

The number of registered banking or mobile money agents in the West Africa sub-region has more than doubled on the back of new licenses issued to new mobile money players.

The number of registered agents rose by 160 percent to 6.5 million in 2022 from 2.5 million in 2021, according to the 2023 State of the Industry Report on Mobile Money by the GSM Association (GSMA).

“The number of agents reached 17 million in 2022, a 41 percent year-on-year increase from 12 million in 2021. In turn, this growth increased the number of active agents to 7.2 million in 2022, a 25 percent year-on-year increase,” it said.

It said the bulk of the growth came from Sub-Saharan Africa, where agent outlets nearly doubled year on year.

“This was driven by a significant rise in agents in West Africa where several new mobile money services were launched,” it added.

According to Mats Granryd, director general at GSMA, some of the key contributors to the growth of mobile money in the past few years have been regulatory changes in large markets.

“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,” he said.

He said not only has this created employment for millions of new agents, but mobile money services are now accessible to more people in Africa’s largest economy.

The report also revealed that West Africa had the highest number of new accounts of all sub-regions worldwide in 2022.

“Within West Africa, Côte d’Ivoire, Ghana and Senegal have been mobile money leaders, followed closely by Benin, Burkina Faso and Mali.

“The introduction of payment service bank (PSB) licenses has also had a significant impact in Nigeria, where mobile money usage has grown steadily,” it said.

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.

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In Nigeria, the agents widely described as ‘Human Automated Teller Machines 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, both men and women, are equipped to carry out services which include account opening; cash deposit; airtime purchase; bill payment; withdrawals and money transfer. And because of this, people prefer to visit POS outlets to carry out transactions than banks as it saves them time and energy.

And for Africa’s biggest economy whose high unemployment rate was estimated at 33.3 percent in 2020 is seeing a dent with the increased adoption of agency banking.

The opportunity to make an additional income is a major motivation for becoming an agent, a 2020 Enhancing Financial Innovation and Access agent survey.

“Agents surveyed are signed up by different principals/service providers. Nevertheless, First Bank (First Monie), OPay, QuickTeller, and MTN top the list of principals with a majority share of agents.”

According to Shared Agent Network Expansion Facilities, the number of bank agents surged by 1,456.9 percent to 1.3 million in 2022 from 83,500 in 2018.

In 2022, mobile money agents were responsible for digitising $294 million (total cash-in transactions), up 17 percent from 2021, authors of the GSMA report said.

They said nearly two-thirds of all incoming transactions are cash-ins performed by agents, making them the main gateway to digital financial inclusion in markets where cash dominates.

Nigeria has five established PSBs such as Hope PSB, 9PSB, MTN’s Momo, Airtel’s SmartCash and Glo’s Moneymaster which are already operating across the country.

The number of PSBs is almost at par with India which currently has six active PSBs such as Airtel Payment Bank, India Post Payment Bank, Fino, Paytm Payment Bank, NSDL Payment Bank and Jio Payment Bank.

In the first quarter of this year, MTN’s active MoMo PSB wallets rose by 1.2 million to 3.2 million, accounting for 43.2 percent of its fintech users.

And Airtel aims to target 36.8 percent of unbanked adults through its Smartcash PSB.

“Our agent network is pivotal in our MoMo ecosystem, bringing the service closer to our customers,” Karl Toriola, CEO of MTN Nigeria said.

The Central Bank of Nigeria has in recent years relaxed its stance on the criteria for operating in financial services by granting Payment Service Bank licences to telecom operators.

Telcos such as MTN and Airtel are pushing aggressively into financial services through their mobile money subsidiaries and getting significant results.