Tuesday, August 07, 2007
Nigeria's Mobile Telephone Financial Markets
Most adult Nigerians cannot actually remember that there was a time in this country when they lived without mobile telephones. But the mobile phone phenomenon is impacting on the lives of ordinary Nigerians in more fundamental ways. Apart from the common uses of talk...and Nigerians can talk and text messages, virtually all the features of any new model are being put to use as far as the network operators can support them. Thanks to the Chinese - mobile phone handsets are becoming so cheap that they have become party gifts for kids.
While these are expected trends, a more profound effect is that on the financial markets. I recently asked a banker about the competition in the funds transfer business within Nigeria. He went on to list the major banks, financial houses and then transport companies that have expanded into courier business - the likes of Edo Line, Chisco, ABC etc - which is an example of Nollywood paradigm in its own right. But he failed to recognise the cellphone service providers who provide the 'backbone' for millions of airtime transactions that are redeemed at a discount at millions of locations across the country. The average daily transactions may run into billions of Naira. This amount is outside the banking sector. There is no way for the Central Bank of Nigeria to capture this sort of data. A financial system in its own right, it has enabled people to solve emergency financial problems in a creative way.
Meanwhile, we still hear a lot of rhetorics around traditional thinking of making payments through cellphones while a functional system regulated by the 'visible hands of the market' has been put in place by Nigerians for Nigerians. In this day and age of globalisation, who knows how this phenomenon will affect the business of Western Union and MoneyGram. They should be worried or better still watch the space before this lucrative Nigerian market is eroded by yet another Nollywood paradigm.
Most adult Nigerians cannot actually remember that there was a time in this country when they lived without mobile telephones. But the mobile phone phenomenon is impacting on the lives of ordinary Nigerians in more fundamental ways. Apart from the common uses of talk...and Nigerians can talk and text messages, virtually all the features of any new model are being put to use as far as the network operators can support them. Thanks to the Chinese - mobile phone handsets are becoming so cheap that they have become party gifts for kids.
While these are expected trends, a more profound effect is that on the financial markets. I recently asked a banker about the competition in the funds transfer business within Nigeria. He went on to list the major banks, financial houses and then transport companies that have expanded into courier business - the likes of Edo Line, Chisco, ABC etc - which is an example of Nollywood paradigm in its own right. But he failed to recognise the cellphone service providers who provide the 'backbone' for millions of airtime transactions that are redeemed at a discount at millions of locations across the country. The average daily transactions may run into billions of Naira. This amount is outside the banking sector. There is no way for the Central Bank of Nigeria to capture this sort of data. A financial system in its own right, it has enabled people to solve emergency financial problems in a creative way.
Meanwhile, we still hear a lot of rhetorics around traditional thinking of making payments through cellphones while a functional system regulated by the 'visible hands of the market' has been put in place by Nigerians for Nigerians. In this day and age of globalisation, who knows how this phenomenon will affect the business of Western Union and MoneyGram. They should be worried or better still watch the space before this lucrative Nigerian market is eroded by yet another Nollywood paradigm.
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# posted by tarry2020 @ 3:33 PM 
