Banking

How Nigeria, others can increase mobile money accounts – World Bank

The World Bank has revealed how Nigeria and other Sub-Saharan African countries can increase the number of mobile money accounts.

According to its ‘COVID-19 Drives Global Surge in use of Digital Payments,’ introducing its ‘Global Findex 2021 database’ report, the apex bank highlighted the digitalisation of cash payments and expansion of phone ownership.

The global bank said while mobile money adoption in the region is three times larger than the 10 per cent global average, 65 million adults still receive payment for agricultural products by cash.

The report stated, “In Sub-Saharan Africa, mobile money adoption continued to rise, such that 33 per cent of adults now have a mobile money account—a share three times larger than the 10 per cent global average.

“Although mobile money services were originally designed to allow people to send remittances to friends and family living elsewhere within the country, adoption and usage have spread beyond those origins, such that 3-out-of-4 mobile account owners in 2021 made or received at least one payment that was not person-to-person and 15 per cent of adults used their mobile money account to save.

“Opportunities to increase account ownership in the region include digitalizing cash payments for the 65 million adults with no account receiving payments for agricultural products, and expanding mobile phone ownership, as lack of a phone is cited as a barrier to mobile money account adoption. Adults in the region worry more about paying school fees than adults in other regions, suggesting opportunities for policy or products to enable education-oriented savings.”

According to the report, the COVID-19 pandemic has increased financial inclusion by driving a surge in digital payments amid the global expansion of formal financial services.

It stated that this expansion created new economic opportunities, narrowed the gender gap in account ownership, and built resilience at the household level to better manage financial shocks.

It said as of 2021, 76 per cent of adults globally now have an account at a bank, other financial institution, or with a mobile money provider. This is up from 68 per cent in 2017 and 51 per cent in 2011. It added that mobile money accounts caused a surge in financial inclusion in Sub-Saharan Africa in 2021.

The World Bank Group President, David Malpass, was quoted as saying, “The digital revolution has catalyzed increases in the access and use of financial services across the world, transforming ways in which people make and receive payments, borrow, and save.

“Creating an enabling policy environment, promoting the digitalization of payments, and further broadening access to formal accounts and financial services among women and the poor are some of the policy priorities to mitigate the reversals in development from the ongoing overlapping crises.”

According to the report, the lack of an identity document is an important barrier holding back mobile money account ownership for 30 per cent of adults in Sub-Saharan Africa. It stated that over 80 million adults with no account still receive government payments in cash.

The co-chair of the Bill and Melinda Gates Foundation, one of the supporters of the Global Findex database, said Bill Gates, added, “The world has a crucial opportunity to build a more inclusive and resilient economy and provide a gateway to prosperity for billions of people.

“By investing in digital public infrastructure and technologies for payment and ID systems and updating regulations to foster innovation and protect consumers, governments can build on the progress reported in the Findex and expand access to financial services for all who need them.”

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