Tech entrepreneur and founder of VTel, a digital service provider offering e-commerce and value-added services, Mr Eniola Adenuga, says mobile money remains a major vehicle for driving financial inclusion in Nigeria.
As such, he said emerging markets like the country could derive robust value from the many promises that mobile money offers.
A McKinsey report states that two billion individuals and 200 million small businesses currently lack access to formal banking services such as savings, investments or access to credit, leaving them vulnerable to predatory lenders and other concerns.
According to Adenuga, comparing Nigeria’s impressive adoption of mobile technology and Internet penetration with the number of active bank accounts in the country shows an obvious disconnect.
“When you look at the number of people who have active bank accounts and look at the number of people who have active mobile lines in Nigeria, you find that there is a huge gap there, and where there are gaps, there are opportunities to be tapped,” he noted.
In the last 10 years, mobile money has grown in certain regions as an effective tool for financial inclusion.
In several markets, it serves as the mainstream financial service, helping millions move from an informal cash economy into a thriving digital economy.
There are now about 316 live mobile money deployments across 98 countries worldwide. Ten years ago, that number was 169 in 71 countries.
Adenuga said more people were getting captured and enjoying the benefits of a digital ecosystem.
He said his company, VTel, had enabled people to do more transaction using digital channels more than ever.
Pointing to the remarkable successes with M-Pesa in Kenya, the VTel boss said more could be achieved in Nigeria through mobile money.
“With mobile money, people are able to send and receive money with ease, even in the most remote of villages. No one is left out and everyone can partake of the immense benefits that a digitized country and economy offers,” he said.
With transaction values hitting the trillion-dollar-mark in 2021, mobile money has hit a milestone faster than anticipated for the industry.
According to McKinsey, by being a gateway into huge and largely untapped markets, digital finance like mobile money has the potential to reach over 1.6 billion new retail customers in emerging economies, and to increase the volume of loans extended to individuals and businesses by $2.1tn.
Currently, sub-Saharan Africa has the largest number of mobile money users, the largest transaction volume as well as transaction value worldwide.
With mobile money, Eniola believes VTel and other providers of digital and value-added services stand to benefit from new revenue streams, and to grow their balance sheets by as much as $4.2tn in aggregate.
He said, “By building and innovating around digital finance capabilities, businesses will have the opportunity to develop new business models ranging across new forms of more data-based financial services, micropayments, and entirely new digital businesses. Existing financial services providers also stand to decrease the direct costs of their current businesses by $400bn annually.
“There is no doubt that mobile money is an enabler of many other services that can help solve critical socio-economic and environmental challenges, such as providing access to essential utilities, sustaining livelihoods and delivering rapid financial relief to vulnerable populations.”