working around the impediments to moble money uptake in nigeria - osondu nwokoro, airtel nigeria

8/12/2019 Working Around the Impediments to Moble Money Uptake in Nigeria - Osondu Nwokoro, Airtel Nigeria

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Working around the Impediments to Mobile Money

Uptake in Nigeria

7 February 2013

Presented

at

Mobile Money Expo, 2013Oriental Hotel,

Lagos -Nigeria

by

Osondu C. Nwokoro

Director, Regulatory Affairs & Special

Projects

Airtel Nigeria


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Outline

Motivation for Mobile Money (MM) services

MM Value Chain

Disturbing MM uptake statistics Reasons for slow MM services uptake

Recommended work arounds

Structured and Flexible RegulationMaster Key for

unlocking MM Industry potentials Conclusion.


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Motivation for MM services

*EFInA Access to financial services in Nigeria Survey 2012; ** NCC statisticsHuge potential in the MM space.

Stimulation of Mobile Money (MM) Service, key plank of Cashless Policy and Financial System

Strategy (FSS) 2020 of the Central Bank of Nigeria (CBN). Aimed at:

(a) facilitating increased utilization of electronic payment platforms; and

(b) promoting financial inclusion and reducing number of unbanked adults by 20% by 2020.

Policy

Total Population: 170m (estimate)

**Total Active GSM Lines: 105m**Teledensity: 78.21 (Oct 12)

*Total Adult population: 87.9m

*Banked Adults: 28.6m

*Unbanked Adults: 58.3m

Demographics

MM, natural evolutionary trend in telcos service delivery model - convergence of

communications and financial services.

Technology


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MMOs

1) Revenue stream

2) Innovation -friendly sector.Still to be

stretched.

SUBSRIBERS

Convenience of

financial transactionswith attendantimprovement in

standard ofliving.

GOVT

1)Stimulationof financialinclusion.

2)Employment generation.

MM Value Chain

All stakeholders can extract valueshare in the cake

Benefits accruable to each stakeholder segment


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Disturbing MM uptake statistics

Represent 2010 data published in 2012 by CBN Financial Inclusion in Nigeria, p.16

Learnings from the above are: countries at similar or lower levels of development asNigeria have recorded uptake numbers from MM. MM services still virtually non-existent in Nigeria almost

two years after first licences were issued.

Despite the potential of the Sector and value to be extracted by

each stakeholder segment , MM uptake is still discouraging.

A recent survey by EFInA stated there are about 440,000 MM activations in

2012, almost two years after first MM licences were issued.


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Why has MM uptake been slow inNigeria?


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Reasons for slow MM uptake

Virtually no public awareness

of the existence of MM

services due to:

Cultural attitudinal

stereotypes towardsfinancial services -

mistrust, apathy, etc,

Illiteracy,

Absence of structured

and consistent educationprogrammes to address

the above.

Financing

Insufficient funds for roll

out due to:

Uncertainty around

prospects of thesector.

Lender-wariness

towards non-bank

MMOs.

Public Awareness


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Reasons for slow MM uptakeContd

Sub-optimal harnessing

of technology due to:

Non-standardization

of equipment

specifications -

leading to integration

challenges.

Unclear short codeallocation process.

Trouble shooting

limitations.

Technology Retail Network

Underdeveloped retail

network due to:

Limitations in MMOs

expertise.

Non-integration of

expertise from

established

distribution chain

segments.


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Recommended work arounds

All stakeholders to

collaborate to

design, fund and

implement acomprehensive, all

segment inclusive

MM public

enlightenmentprogramme.

Financing

CBN to consider

establishment of an

intervention fund for the

non-bank led MMOs. Federal Government to

consider granting MM

industry fiscal concessions,

such as, tax holidays,import duty waiver, etc.

Public Awareness


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Retail Network

Recommended work aroundscontd

Specifications of

basic equipment

functionalities to beprovided by the

NCC.

Expedited approval

of a uniform shortcode scheme by

the NCC.

Technology

MMOs should

collaborate with

established

distribution

chainsegments-

Telcos, FMCGs


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Structured & Flexible RegulationMaster Key for

unlocking MM Industry Potentials

Two RegulatorsCBN and NCCinvolved.

Critical for CBN and NCC to align initiatives for coordinated andproactive regulation.

Execution of Memorandum of Understanding (MoU) between

CBN and NCC recommended. Similar to: NCC/NLRC and CPC.

o MoU should clearly specify roles and responsibilities of

each party. Thus:

NCC to oversee technology and Telcos compliance

with CBN prescriptions.

CBN to be responsible for operational oversight,

including risk management and AML compliance, etc.

Collaboration between the CBN and NCC is key

for MM success.


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Structured and Flexible RegulationMaster Key for

unlocking MM Industry PotentialsContd

As an evolving industry, flexibility in the choice

of guiding regulatory models is stronglyrecommended.

If one model is not working, we should be bold

to try another one till right fit is found.

Ghana - Bank of Ghana currently reviewing service modeland consulting widely across different sectors of the MM

Industry.

Pakistan - provides for 6 months review period.

Practices in other jurisdictions:


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Conclusion

o Recommended work arounds are interim measures aimed at

kick-starting slow MM uptake.o Collaborative regulation by the CBN and NCC critical for

effective industry co-ordination.

o Long term solution is to review current Regulatory

Framework by empowering stakeholders capable of driving

service uptake. This will ensure the realisation of Federal

Government goal of financial inclusion.

o Telcos operating model has consistently demonstrated

capacity to address the four constraints identified above.

o Regulatory Framework should be reviewed to allow greaterTelco involvement to conclusively eliminate these

constraints.


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THANK YOU

working around the impediments to moble money uptake in nigeria - osondu nwokoro, airtel nigeria

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