Nigeria's cash crisis provides boon for fintech and mobile money operators, Fitch reports

Summary

Nigeria is experiencing a cash crisis due to a demonetisation effort by the Central Bank of Nigeria. This has caused considerable social unrest, but has also been a boon for the country's fintechs and mobile money operators such as MTN and Airtel Africa. Data from Nigeria's Inter-Bank Settlement System shows a pronounced uptick in e-payment adoption at physical POS, and the Central Bank of Nigeria hopes that the growing use of e-payments will increase the number of citizens within the formal financial system and reduce reliance on cash. MTN is attempting to rapidly expand its mobile wallet platform's customer base in order to increase adoption. The current crisis provides additional momentum to these budding mobile money operations.

Q&As

AI Comments

👍 This increase in e-payment adoption is a positive development for mobile money operators in Nigeria and provides additional momentum to these budding mobile money operations.

👎 Despite the chaos that has ensued nationwide in response to the cash crunch, the circumstances are a positive development for fintech operations and mobile money operators, but it has caused considerable social unrest.

AI Discussion

Me: It's about how Nigeria's cash crisis has been a short-term boon for the country's fintechs and mobile money operators. It looks like more people are turning to mobile payments and digital banking due to the lack of physical money in circulation.

Friend: That's really interesting. It looks like the government is trying to encourage people to move away from cash and use digital payments instead. I wonder what the long-term implications of this shift will be. Will it help to reduce corruption and black market trading? Will it help to increase financial inclusion?

Me: Those are great questions! It looks like the Central Bank of Nigeria is hoping that this shift towards digital payments will help to reduce corruption and increase financial inclusion. So, it looks like the short-term benefit is providing an incentive to adopt digital payments, but it remains to be seen what the long-term implications will be.

Action items

• Research the current mobile money operators in Nigeria and their strategies for capitalizing on the cash crisis.
• Explore the potential for expanding mobile money operations to rural areas in Nigeria.
• Investigate the Central Bank of Nigeria's efforts to reduce cash reliance and increase the number of citizens within the formal financial system.

Technical terms

Fintech

Short for “financial technology,” fintech is a broad term used to describe any business that uses technology to provide financial services.

Mobile Money Operators

Companies that provide mobile money services, such as mobile banking, mobile payments, and other financial services.

Demonetisation

The process of removing a currency unit from circulation or replacing it with a new currency unit.

Inter-Bank Settlement System

A system used by banks to settle payments between each other.

Point-of-Sale (POS)

A type of transaction where a customer pays for goods or services at the point of sale.

Payment Services Bank (PSB)

A type of bank that provides payment services, such as money transfers, payments, and other financial services.

YoY

Year-over-Year, a comparison of the current year's performance to the same period in the previous year.

Cash Withdrawal Fees

Fees charged by banks for withdrawing cash from an ATM or other banking institution.

Similar articles

0.9050198 Nigeria grapples with cash crisis ahead of elections

0.8948685 Nigeria’s old currency can be used longer amid cash crisis

0.862202 Closing the digital divide with Android smartphones in Africa

0.85673726 The Trilemma of Central Bank Digital Currencies

0.85544366 Instant payments finally reach America with FedNow