Consider Kenya’s Mobile Banking Model – Mr Chris Ife

In order for mobile banking services to achieve a higher success rate in Nigeria, the Central Bank of Nigeria (CBN) has been advised by The Managing Director/ Chief Executive Officer, Mr Chris Ife, to consider the Kenyan mode

The Managing Director/ Chief Executive Officer, Mr Chris Ife, while given out  this recommendation, pointed out that Kenya’s mobile banking model seems to have defeated the vast difficulties associated with the cashless transaction platforms, saying that if employed by the CBN, this form of money transfer would cause the cashless policy to reach an unprecedented percentage of the unbanked population.

Mobile banking can be viewed as an innovation that lowers trading costs, transaction time and allows for immediate financial transfers (credits and debits) by both the formal and informal sectors. It has the potential to drive financial inclusion by providing efficient transaction options and greater reach.

Mobile money is a tool for economic growth and development, if fully explored. It enables monetary transactions to be done on mobile phones through text messaging.

The CBN had introduced mobile money services to provide basic financial services and create payment access especially to Nigerians without bank accounts, as well as to help drive financial inclusion in the country. 16 banks and other financial institutions were licensed to establish the services all over the states in August 2011 by the CBN.

A survey by the NOI Polls Limited last week attributed the slow pace of adopting the mobile money services to the low public awareness on the payment transfer system.

However, the FDC noted that borrowing from Kenya’s story, mobile banking remained the most feasible means to create a successful cashless economy.

It explained: “Nigeria can take a cue from Kenya where mobile money has been the most successful. Kenya’s model was developed by a single mobile telecommunication company (Safaricom) focused on mobile banking services, hence creating Kenya’s only online bank with agents (who serves as cashiers) across the country.

“Besides, Safaricom also benefited from launching the service in a country with a banking regulator which permitted Safaricom to experiment with different business models and distribution channels.
It added: “The major grey area according to the central bank is the ability to control the platform and the anticipated effect on monetary policy since consumers do not need bank accounts in order to use mobile banking services.

“The mobile banking platform in some sense creates another ‘bank’ which may be difficult to regulate. Therefore, the CBN may be unwilling to adopt the mobile banking platform under the cashless policy model.”