Mobile money services was first launched in Kenya in 2007. In Nigeria, The Central Bank of Nigeria (CBN) released the regulatory framework for Mobile money in 2009 and by 2011, the first set of licenses were issued and mobile money services officially began.

Mobile money is a service whereby customers use their mobile phone device to send and receive monetary value. Mobile money is the ability to transfer money electronically from one person to another using a mobile phone as a mobile wallet. A mobile money agent is any person/entity that is engaged by a financial institution (Super Agents, Fintech, Mobile Money Operators and Deposit Money Banks) to render specific financial services on their behalf at the agent's location. Agent banking is the provision of financial services to customers by a third party (agent) on behalf of a licensed deposit financial institution/operator. Agents whose principal is a bank may consider themselves as ‘AGENT BANKERS’ whilst, agents whose principal is a licensed mobile money operator may consider themselves as a ‘MOBILE MONEY AGENT’. The names may be different but their purpose and services are the same.

The target for Mobile Banking are the unbanked and underbanked.

  • Unbanked: People who have no account with a bank or any other financial services provider.
  • Underbanked: People who have an account with a bank but limited access to other financial services - such as loan, investment, insurance, etc.
Most unbanked and underbanked people are in the rural areas. So the key target for mobile money and agent banking are the over 60% of the population in the rural areas who are unbanked or underbanked.

You ask: But why is mobile money and agent banking such a big deal? Why are people pushing it hard to ensure it succeeds? Here are some reasons:

  • For easier and quicker access to financial services for everyone: With a Mobile Money agent close to you, you wouldn't have to go very far to a bank to access a financial service.
  • To financially include the unbanked and underbanked citizens. Access to financial services is a key enabler in reducing poverty and boosting prosperity. This is why the government is placing a lot of emphasis on making sure people in the rural areas have access to financial services
  • For deeper penetration of financial services to the rural areas. Mobile Money agents are the most sensible and profitable way for financial institutions to sell their services to people in the rural areas who don't have phones. 
  • For faster and more convenient payment processes. Through Mobile Money agents, people can more easily pay for essential services like electricity, TV subscription, etc.
  • To promote a cashless economy. The Government wants to reduce the amount of paper cash in circulation. If there are more mobile money agents, there will be less need to use actual cash.