In the latest report by S&P Global Ratings, Nigeria’s mobile money landscape comes under scrutiny, revealing a gap compared to its counterparts, Ghana and Kenya. Despite a commendable surge in mobile phone usage, reaching 93 percent (103 million) in 2023 from 90 percent in 2020, registered mobile money accounts in Nigeria still fall short.
Fintech emerges as a crucial player, poised to close the gap of financial exclusion and literacy in Nigeria over the next five years. This becomes particularly significant as nearly 40 percent of the population lacks formal banking services.
The report underscores positive developments, citing an 18.1 percent increase in registered mobile money accounts per 1,000 Nigerian adults within a year as of November 2023. IMF data further highlights a rise in mobile money accounts from 191.0 in 2021 to 225.9 in 2022, accompanied by a doubling of mobile money agent outlets per one thousand square kilometers, from 680.9 to 1,618.6.
Digital banking’s strategic pivot proves instrumental, shielding Nigerian banks from economic volatility and fostering profitability. Despite being excluded from cryptocurrency transactions, commercial banks in Nigeria have successfully expanded their reach and product offerings, significantly enhancing financial inclusion.
S&P Global Ratings points to Nigeria’s citizens as early cryptocurrency adopters, reflective of a shift in payment and savings preferences. With 70 percent of the population under 30, the nation’s demographic landscape, coupled with an entrepreneurial spirit and a burgeoning digital ecosystem, positions Nigeria for growth.
While mobile penetration nears 100 percent in 2023, challenges persist, with only half the population having broadband access and approximately a third owning a smartphone. Addressing these connectivity gaps is crucial for propelling Nigeria towards a more inclusive and tech-savvy financial future.
By: Montel Kamau
Serrari Financial Analyst
24th January, 2024
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