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Digitalising Payments Will Increase Mobile Money Account In Nigeria – World Bank

Digitalising Payments Will Increase Mobile Money Account In Nigeria – World Bank

The world bank disclosed that digitizing cash payments will increase the number of mobile money accounts in Nigeria and other sub-Saharan African countries.

The world bank revealed that although mobile money has gained widespread adoption in the African region, which is three times larger than the 10 percent global average, 55 million adults still receive payment for agricultural products by cash.

A report by the Global Findex 2021 database, disclosed that in sub-Saharan Africa, mobile money adoption has continued to rise, where it is estimated that 33 percent of adults now have a mobile money account, a share 3 times larger than the 10 percent global average.

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Mobile money services which were originally created to enable people to send remittances to friends and family members living elsewhere within the country, it is interesting to note that the adoption and usage of these services have spread beyond those origins, such that 3 out of 4 mobile account owners in 2021 made or received at least one payment that was not person-to-person, and 15 percent of adults used their mobile money account to save.

However, a lack of mobile phones is cited as a barrier to mobile money account adoption, which is a constraint to increasing account ownership in the region, including the digitalizing of cash payments for about 65 million adults with no account for receiving payments for agricultural products.

The covid-19 pandemic has been disclosed as one of the factors that increased financial inclusion by driving a surge in digital payments amid the expansion of formal financial services.

This expansion has been disclosed to create new economic opportunities, narrowed the gender gap in account ownership, and built resilience at the household level to better manage financial shocks.

As of 2021, 76 percent of adults were reported to have a bank account, with a mobile money provider, and other financial institutions. One beautiful aspect of mobile money is that every transaction and account balance is stored in the digital payment platform, and even if a person misplaced his phone or sim card, the money is still very safe.

Digital payments are safe, fast, and secure with ease of operation that does not require one to be literate or tech-savvy before they can perform transactions. With about 22 percent of adults worldwide revealed to not having any form of savings at a formal financial institution, digital payments have therefore created the opportunity to include poor people in a system of automatic deposits that enables them to overcome the psychological barriers of saving.

According to some groups of researchers, they found out that in Malawi, direct deposit of cash crop receipts into farmers’ savings accounts helped boost productivity. As these farmers invested 13 percent more in farm inputs than those who weren’t offered the option and received their crop proceeds in cash.

In low and middle-income countries like Nigeria for example, where millions of people remain unbanked, mobile money has aided these people to access financial services while tackling their over-reliance on cash.

The digitization of financial services during the pandemic was one of the key growth drivers for Africa. Digitization of banking service channels is strongly and significantly associated with economic growth where it provides people the convenient access to a diverse range of financial products and services which can boost aggregate expenditure by improving the GDP level.

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