Mobile money adoption to increase by 39% in 2025

Mobile money accounts are expected to grow by 39 percent of the sub-Saharan population by 2025, a global mobile money 2021 report shows.

The 2022 state of the industry report disclosed that Sub-Saharan African adults with mobile money accounts doubled from 12 percent in 2014 to 21 percent in 2017. In 2021, the number of registered accounts reached 1.35 billion globally, up 18 percent year-on-year, which is 10 times more than there were in 2012.

Also, the mobile money industry processed more than $1 trillion in transactions in 2021. The year-on-year increases in transaction values were driven by new customer uptake and a growing number of mobile money accounts in use, the report said.

Nika Naghavi, MFS Africa’s executive director of mobile network operators, during the TechCabal’s Future of Commerce event held in September, expressed her agreement with GSMA on a possible explosion of mobile money operations in Nigeria. According to her, the entrance of telcos like MTN and Airtel into the Nigerian mobile money market is a big trend for mobile money on the African continent.

“Adoption of mobile money in Nigeria through MTN and Airtel will change the landscape and introduce innovative services and partnerships that will differ from what we’ve seen so far,” she said.

“Nigeria is Africa’s largest unbanked population, and while its payment industry has flourished, there’s hardly any lead player banking the unbanked in a sustainable manner. This is where mobile money comes in,“ she added.

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Research conducted by Grameen Foundation, in partnership with the MasterCard Center for Inclusive Growth, shows that user experience is a major factor in the growth of mobile money services, especially among poor users with limited or no formal banking experience.

Data released by GSMA in 2021, indicated that 5.3 billion people had subscribed to mobile services, representing 67 percent of the global population.

The report shows that there will be an additional 400 million new mobile subscribers by 2025, most of whom will be from frontier markets in the Asia Pacific and Sub-Saharan Africa, this will bring the total number of subscribers to 5.7 billion representing 70 percent of the world’s population.

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 64 percent own a phone.

However, data from the Nigerian Communications Commission (NCC) show that the number of active mobile subscribers stood at 214 million as of October 2022.

Telephone connections per 100 people stood at 112.5 percent between January and October 2022, according to the NCC.

Similarly, the West African Economic and Monetary Union (WAEMU), ‘the Global Financial Inclusion Database and employs logistic models’ highlighted the drivers of mobile money adoption, it said “having a bank account, being in the workforce, receiving domestic remittances, owning a mobile phone, and having a national ID favor mobile money adoption when measured as a global state.”

According to Google, Mobile money is defined as the use of mobile phones to conduct financial transactions, which can bring many benefits to individuals, particularly in developing countries

An analysis of the report titled ‘Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19, showed that Nigeria’s banked population increased by 15.6 percentage points to 45.3 percent in 2021, the highest in 10 years from 29.7 percent in 2011, the 45.3 percent put Africa’s biggest economy in the 18th position out of 25 SSA countries.

Similarly, the number of registered mobile money agent outlets per one thousand square meters in Nigeria has increased by 380.2 percent to 680.9 in 2021 from 141.8 in 2020, an International Monetary Fund (IMF) survey has shown.

“Mobile money agents are bridging the unbanked gap by bringing more people into the financial net, says Moses Ojo, a Lagos-based economic analyst.

“They are bringing those who are not financially included into the net by opening accounts for them and also embarking on financial transactions for them,” said Ojo.

He also said that for the economy, increasing the rate of financial inclusion is assisting in meeting the Central Bank of Nigeria (CBN) of increasing financial inclusion to 95 percent in 2024 from 64 percent in 2020.