Introduction
In a country such as Nigeria, where there are over 36% of adults who are exempted from the official Financial system, the bringing in of mobile money startups plays a major role and serves as an important force in closing this gap, creating a great avenue of hope for financial inclusion in the country.
This gap has served as a challenge amongst the populace and also an avenue for great establishment in the Fintech sector. Taking a deep look at the country’s rate of high use of mobiles, these startups come in handy as being secure, quick and also making it easy for people to access affordable and direct financial services with the use of their phones. This medium doesn’t just make it accessible to everyone but it also mirrors success stories worldwide which events happened in places like Kenya’s M-Pesa and also Bangladesh’s bKash, which have largely brought about an expansion in financial services to inadequate populations. The induction and imbibing of mobile money is more than just a technological Development and adoption in Nigeria, it has served as an important step taken towards economic power and all-round growth showing greatly the major role of tech startups in bringing about a notable transformation in the financial system and also ensuring a wide range of economic Participation within and across the nation.
The beauty of Mobile Money Startups inculcated in Nigeria.
As it has been generally accepted and confirmed that 36% of adults are financially exempted from some financial activities, mobile money startups have been of great importance and help in bridging this notable gap.
The world at large rides on innovative aids and solutions that make great use of the nation’s extensive mobile network to carry out financial assistance and services to the inadequate and less privileged. In line with these are companies like Opay and Paga that have made a notable impact.
Paga is a very user-friendly platform that has helped make things simpler for people in carrying out transactions, making payments for goods and services, transferring money and also having access to other services such as loans and credits effortlessly. The impact of this company is rated top notch as it has helped reduce the hassle of carrying physical cash around and physically going to banks to make use of banking infrastructures.
Opay also has brought about reliable results as it has capitalized on the combination of mobile money services and also meeting up with daily needs and services which further include transportation, gifts and food delivery etc. This adoption does not only increase the level of convenience but it also increases the use of mobile money thereby continually promoting and showcasing its potential for multifaceted impact.
Regardless of their well-proven successes and results, these startups create challenges and problems such as problems around regulation of money, the importance of technological improvement and advancement, and gaining the trust of the populace that imbibe in the traditional way of handling cash. However we can’t override the place of their impact, how their innovative models around financial involvement is playing a major role around mobile money startups within the demography of Nigeria.
Problems and opportunities
Making use of Nigeria’s mobile money mediums brings about complexities in the regulation of money and market imbibing opportunities. A standard has been set by the Central Bank of Nigeria (CB) to regulate the framework of these companies to ensure the security and integrity of these mobile money services are protected.
Nevertheless, Startups majorly find these regulations put in place by CBN as strict but exact constituting problems to their innovation and services. There was a report by the GSMA that talked about the importance of “a balanced and suitable regulatory approach and system that could help their innovation as well as aiding with financial security.” Suggesting furthermore that the rigidity around their framework can do more harm than good and thereby lessen the growth and impact of mobile money in the country and ecosystem at large.
Another problem that needs to be looked into is market penetration. Asides 80% rate of mobile penetration within the country, taking mobile money services to undeveloped areas and inadequate populace involves surpassing all these barriers which also includes lack of digital literacy, unavailability and limitations of infrastructure, cultural hold back towards non-traditional banking services. However Startups like Opay and Paga have used a formidable strategy such as involvement and partnership with local communities, investing in the user’s education system, the use and creation of easily used interfaces that require a small amount of technical knowledge.
Aside having these problems and challenges, the avenues created for the transformation of financial inclusion is skyrocketing in Nigeria. The database and analysis in the World Bank Findex shows that great increase in the availability and access of financial services can lead to an increment in savings, investments in the academia sector, and an utmost growth in economy looking strongly at the effective impact of mobile money startups in pushing and fostering socio-economic advancement in Nigeria.
The Research and Findings of insightful experts.
In further bringing out the effectiveness of mobile money to further yield positive results and tangible growth in the future, insights from well-recognized experts and authorities cannot be over-emphasized as they play a major role in the progress of this system as they continually understudy it.
The CEO of Paga, Tayo Oviosu gave strong emphasis on the ability and capability of their innovation regardless of the regulatory problems and challenges: “Scaling through the regulatory landscape could be quite tough, but it has also helped in incentives to bring about more innovative and be secure around the solutions we provide.” This strongly brings about the need for a regulatory environment that actually supports innovation like this while ensuring that financial security is well in place.
Furthermore, The 2020 report of The GSMA shows emphatically the vitality of not imbibing regulatory rigidity bringing up a suggestion that “It’s best to imbibe in adaptive regulatory frameworks which is very important for creating an environment where the use of mobile money can ride upon and bring about an expansion in financial inclusion.”
Not just that, similarly the World Bank has as well understudy the effective impact of mobile money stating that “digitally financial services which includes mobile money tends to offer a strong means and medium for the extension of financial inclusion to underdeveloped populations.”
Perspectives like this as well as data coupled together from the Central Bank of Nigeria which is trying their possible best to ensure they are actively working towards a more advanced system and structure and further bring forward clear directives for tech startups to inculcate. The complexity doesn’t just evolve around the innovations within the limits of regulatory bodies but to ensure engagement with them to further shape a heightened sense of support within the ecosystem for mobile money’s advancement and its important role in Nigeria in the aspect of financial inclusion.
Recommendations
For involving in startups:
Ensure to create innovatives within the framework of the regulatory bodies:
Use the already stated and laid down regulations as a bedrock and foundation for your innovation, thereby making sure that your solutions are not just great and results-oriented but also compliant.
Give room for educating users: Give thorough investment to educating your targets about the use, benefits and also advantages of mobile money to further enhance adoption of this system especially in rural and underdeveloped areas and Communities.
Make it very accessible and inclusive:
Build interfaces and services that can accept and work with Nigeria’s varieties of language and cultural demography to make sure your technology is generally accessible to all parts of society.
Give into building of partnerships: Join hands and ideas with financial organizations, company stakeholders and also other telecom companies for the expansion and extension of your services offered and its reach.
Protocol suggestions for regulatory bodies:
Ensure to create a very flexible regulatory sandbox:
Making use of a formal regulatory sandbox that gives room for startups to be able to test their financial innovative products and services in a monitored environment lessening the problems around the entry and bringing in innovations.
Make the attaining of licenses quite easy: Joining hands and helping mobile money startups to carry out a wide range of campaigns that could cut across the nation on Financial literacy, showing them the importance and the use of mobile financial services being provided.
Bring about the increase in infrastructural advancement and availability: The effectiveness and the improvements of digital and financial infrastructures should not be overlooked as there should be great investments to encourage the growth and development of mobile money services especially in underdeveloped areas and Communities.
If these recommendations for mobile money startups in Nigeria are taken into consideration it could help reduce the problems around regulation within the market and environment more effectively and also help the regulators to bring about a more adequate ecosystem for the Development of mobile money also with financial inclusion across the nation.
Conclusion
This article has shown that it had understudied the effective and impactful role of mobile money startups in closing of the gap in Nigeria’s financial system regardless of the regulatory problems that could occur and the importance of a wider range of market penetration. The insightful tech authoritative bodies and leaders have further shown the importance of innovations within the boundaries of an effective regulatory framework. To progress and move ahead for startups involves accepting and working according to the regulatory standards, seeing the importance and giving into education of users, and further ensuring that the services are acceptable, accessible, and also inclusive. Law and protocol makers can help in fostering this growth and development by the flexibility of regulations, give easy access to licensing and notable investment in digital amenities.
Furthermore, the joint and oneness in the efforts of the mobile money startups, alongside taking actions towards policy reformation, are all important for unveiling the effectiveness and potential of financial inclusion in the country. This is a great call to action for startups and also policymakers to come together and collaborate, innovate and also develop financial services for the future in a way that is impactful, secure and accessible for all Nigerians.
Hilary Utuke is the CEO of Korlod Works, a top Digital Marketing firm in Lagos. He’s authored four books including “Digital Strategies for Online Brand Visibility” and created Digital Luminary Pro (TM), a model helping Nigerian Thought Leaders connect with Millenials and GenZ audiences.
source: https://tribuneonlineng.com/managing-fintech-innovation-the-effectiveness-of-tech-startups-on-financial-involvement-in-nigeria/#google_vignette