Mobile Money: Glo Xchange targets over 80 million unbanked Nigerians

By Prince Osuagwu

It’s no sweet story that while the new world has seen countries where an average 4 year old does communications and major transactions online, over 80 million adult Nigerians are still unbanked. They are not making any formal banking transactions.

It becomes more of a concern that major reason for this is the absence of physical bank branches, particularly in the rural areas.

The irony, however is that even in such areas where majority of adults yearn, crave and wait endlessly for physical bank branches, there are telecommunications services. The General System for mobile communications, GSM which debuted in the country 2001 has penetrated almost everywhere and hands the limitless mobile phone power to the user.

However, ignorant of the limitless possibilities of the mobile phone and the inability of most operators to activate such possibilities, the rural man is frantically seeking for help which he unknowingly has in his hands.

But second National carrier, Globacom, recently pooled partners across the banking sector to address the issue. It resulted in a mobile money platform tagged Glo Xchange.

The initiative is meant to take banking transaction to the door step of the unbanked and help create employment opportunity for teeming Nigerian youths trotting the labour market.

Glo Xchange is described as the easy and convenient platform that will enable Nigerians to use their mobile phones to send or receive money and pay for airtime, goods and services, including utility such as electricity, water bills and pay TV subscription in different parts of the country.

It targets to recruit about 500,000 agents in the next five to six years who will have the opportunity of earning excellent commissions.

Globacom also said the agents can start the business with as little as N20,000 and earn up to twice their investment as commissions monthly, depending on their volume of transactions. It promised that funds on the platform would be protected by its trusted financial partners such as Firstmonie, Ecobank, Stanbic IBTC and Zenith Bank  who will help to keep the money safe.

Head of Glo prepaid, Mr Kamal, Shonibare believes that by the time the platform hits target, it would no longer be economical for any bank to build bank branches.

The Central Bank of Nigeria, seems to agree with him, anyway. The apex bank at the launch of the platform, particularly expressed pleasure that Globacom had keyed into its plan to use telecommunications gain financial inclusion in the country.

Director Banking and payment systems department of the Central Bank of Nigeria, Mr Dipo Fatokun, while unveiling the platform in Lagos, admitted that Glo’s new initiative would enable more Nigerians, especially those in the rural areas, use electronic channels to make financial transactions.

He regretted that the banks were yet to make significant impact in the area of bringing financial services to the majority of the people due to infrastructural constraints, saying that Glo Xchange would do a face lift to this anomaly.

“The Management of the Central Bank believes that the next revolutionary step in this journey of expanding financial access is the Bank’s Mobile Money and Agent Banking Framework.

This framework is aimed at encouraging financial institutions to partner with retail agents to extend financial services in locations in which building new bank branches would not be economical.

In this regard, it was expected that existing Telecommunication Companies in the country could compliment the efforts of the CBN to deepen Financial Inclusion and the cash-less policy through the building of agent networks and awareness creation in collaboration with the Banks and the Mobile Money Operators.

Nigeria has recorded significant growth in efforts to migrate to a cashless environment. “In order to evolve a credible payments system, key electronics channels were identified and relevant guidelines were issued by the CBN to regulate their operations. Some of these channels, which are mostly operational today, include Point of Sale (PoS), Mobile Payments, Multi-functional Automated Teller Machines (ATMs), Internet Banking, NIBSS Instant Payments (NIP), and Direct Debits”.

However, Fatokun said that an appraisal of the utilisation of these channels indicated their tremendous usage as a means for the settlement of financial obligations.

“For instance, the deployment of ATMs across the country increased from about 10,727 in 2012 to nearly 15,000 as of June 2014. This has led to an increase in ATM transactions from about N1.3 trillion in 2012 to about N1.7 trillion as of June 2014.”

Continuing he said, the deployment of PoS terminals increased from about 114,400 in 2012 to over 125,000 in June 2014. On the back of this, the value of PoS transactions increased from about N57.3 billion in 2012 to N138 billion as of June 2014. We have also recorded significant growth in the adoption and usage of other e-payments channels such as Electronic Fund Transfers and other internet-based transactions.

For him, the Glo initiative represents a massive step in the country’s quest to transit from a cash to an electronic based economy. “The forum is significant to our quest of using telecommunications to bring more Nigerians into the financial system, because it is worrisome that over 46 percent of adult Nigerians have no access to financial services. But the CBN is working to bridge that gap through a well formed national financial payment system.”

Meanwhile. Head of Glo prepaid, Mr Kamal, Shonibare Speaking said the initiative is another unique opportunity to offer more financial services to Nigerians. “It is a convergence of all financial services to the mobile phone. There are 20 million Nigerians with access to financial services through banks, but over 80 million Nigerians are however unbanked.

“By strengthening the role of telecoms operators in the scheme, service adoption levels will grow exponential” he further argued

Also making his remark at the event, chief executive officer, Financial Derivatives Company Limited, Bismark Rewane, said the objective of the synergy is to sustain the development of an efficient payment system, adding that it would improve monetary circulation.

“It is an opportunistic investment but will help enhance linkages between various industry verticals. It will also strengthen the velocity of transactions”. Globacom has, since launch, been at the forefront of introducing innovative products and services in the Nigerian market, including per second billing, mobile internet, M-Banking, and prepaid roaming, among numerous others.

The Mobile Money Agent Network, is in partnership with licensed mobile money operators, Firstmonie, Ecobank and Stanbic IBTC. The initiative is expected to accelerate the mobile money revolution, as it will avail the industry of the much needed distribution network.

- Culled from : http://www.vanguardngr.com