A big nightmare in the Nigerian economy is the accessibility of financial services in the country, especially for those who live in the remote and northern regions. Nigeria is among the countries with the largest number of unbanked and underbanked citizens in the world.

Specifically, according to the World Bank’s Global Findex 2021 database, only around 45% of the Nigerian population has a bank account, ranking the African giants with Malawi (43%), Mali (44%), Morocco (44% ), Panama (45%), among others.

In the same direction, Global Finance Magazine noted that a staggering 60% of the Nigerian population is unbanked, indicating an estimated 123.7 million people without access to banking services, despite having an internet penetration rate than 70% and be the largest economy in the world. the African continent.

Meanwhile, Nigeria’s growing banking penetration and access to financial services have been a growing concern for the main bank, resulting in several innovations to boost financial inclusion in the country. The Central Bank of Nigeria launched the National Financial Inclusion Strategy in October 2012, with the goal of reducing the financial exclusion rate to 20% by 2020. However, this goal has not yet materialized; the main bank has now set another target of a 95% financial inclusion rate by 2024.

MoMo PSB to boost Nigeria’s financial inclusion plan of 95% by 2024

Before delving into the figures and the growth registered in recent years, it is essential to understand what it means to be financially included. According to the World Bank, financial inclusion means that people and businesses have access to useful and affordable financial products and services that meet their needs (transactions, payments, savings, credit and insurance) delivered in a responsible and sustainable manner.

Financial inclusion has been identified as a key enabler to reduce extreme poverty and boost shared prosperity, as a transaction account allows people to store money (save), send and receive payments.

Following the need to boost financial inclusion and as Nigeria continues to struggle to achieve its 80% financial inclusion target, the licensing of telecommunication operators such as Payment Services Banks (PSBs) through their subsidiaries has revolutionized the payment space and is expected to accelerate the journey into a well-captured market, leveraging its huge mobile subscription base across the country.

MoMo PSB leading the drive for financial inclusion

MoMo PSB is currently leading the charge to improve financial inclusion with its mobile money business in Nigeria. The Central Bank of Nigeria approved the launch of MoMo Payment Service Bank in April 2022 and it has since created 4.2 million wallets in less than two months of operation.

The feat accomplished in the space of two months is an indication of the potential for the PSB to improve the provision of financial services in the country. Basically, MoMo PSB is a secure electronic service that allows MoMo wallet holders to store funds, send and receive money, make payments and perform other transactions just by using their mobile phones.

According to MTN Nigeria’s 2022 Semi-Annual Report, MoMo service, which is a subsidiary of MTN Nigeria and launched on May 19, 2022, recorded around 4.2 million wallets, while the transaction volume within the period It was 7 million. From May 2022 to November 2022, MoMo PSB recorded a transaction volume of over 35 million with a value of over 32 billion naira.

Nigerians are beginning to migrate to mobile-enabled payment channels due to the growing young population residing in the country, with an affinity for online shopping and are more technology-oriented compared to the previous generation. The preference for cashless transactions can also be attributed to security concerns, which have required transition in banking and payment methods.

To boost financial inclusion in Nigeria, MoMo PSB is leveraging MTN Nigeria’s customer base as the country’s largest telecom service provider, controlling around 38.4% of the market. Note that PSBs are expected to extend financial services to rural areas and areas where Nigerians do not have bank accounts.

MoMo PSB leading the drive for female financial inclusion.

According to a report by EFInA (Enhancing Financial Innovation and Access), almost 50% of the Nigerian population suffers from extreme poverty, with an unemployment rate of 23%, and financial exclusion is 36% for women and 24% for men, with a relative gender gap of -33%, putting Nigeria below its peers.

To further boost women’s financial inclusion in Nigeria, in 2021, the African Development Bank Group (AfDB) signed a $500,000 grant agreement with Y’ello Digital Financial Services (YDFS), a fintech subsidiary of MTN Nigeria, for a study on economic, religious and social factors that hinder access to finance for women in northern Nigeria. The research, which includes a feasibility study, a women-focused design, and testing, focused on both agents and customers to provide insights into women’s use of mobile money services. The research findings will help create strategies to further improve financial inclusion in Nigeria, especially in the north.

Nigeria’s high unemployment and economic hardships create a cccccc need for female financial inclusion. By empowering women through female agent networks, MoMo ensures that women in rural Nigeria are financially included.

Impact of MoMo PSB on the Nigerian economy

An innovation that does not have a positive effect on the economy or the host community is useless, to say the least. This is a highlight of how MoMo Payment Service Bank (PSB) is impacting the Nigerian economy while driving financial inclusion.

  • financial inclusion: MoMo PSB strengthens the Central Bank’s financial inclusion drive by ensuring penetration of the unbanked and underserved in the northern part of the country and throughout the country. This innovation basically eliminates the hassle of opening regular bank accounts, queues, and verification processes, among others.
  • Incoming remittances: MoMo PSB, through the MoMo wallets feature, allows users to receive incoming remittances from any country in the world.
  • Employment opportunities: A constant economic stagnation affecting Nigerian society is the level of unemployment. According to the National Bureau of Statistics (NBS), Nigeria’s unemployment rate stood at 33.3% in the fourth quarter of 2022, indicating that at least 23.2 million were out of work. However, MoMo PSB has been able to offer employment opportunities to young Nigerians by empowering them as mobile money agents.
  • Female empowerment: PSB enables the empowerment of women and youth through bank agents and populations in Northern Nigeria to deepen financial inclusion. MoMo PSB allows the inclusion of women in the country’s financial services network.
  • Economic growth: With the recorded improvement in the financial space and a decrease in the number of unemployed citizens, the Nigerian economy will grow further in the coming years as a result of the contribution of the telecommunication sector.

Bottom line

The MoMo PSB is poised to enhance financial inclusion in Nigeria by penetrating northern and rural areas so that the unbanked and underprivileged can access affordable and hassle-free financial services. This, in turn, could generate significant growth for the Nigerian economy, provide employment and empowerment opportunities, as well as a means to receive remittances from the diaspora from the comfort of our homes.