The path to digital financial inclusion in Nigeria: Experiences of Firstmonie

Abstract

In emerging markets like Nigeria, the number of adults excluded from formal financial systems has developed an informal system excluded from formal reporting structures that aid economic development and policy formulation. Documentation requirements, costs, access to financial services and literacy are contributing factors to the high adoption of informal systems. Unlike banking, mobile telephony access and adoption has revolutionised traditional perspectives of financial access and inclusion. This has warranted regulatory changes and the introduction of a new cadre of financial service providers: mobile money operators (MMOs). The policy changes that resulted in MMO licensing has produced over 20 operators and the opportunity of offering financial services to the larger unbanked community. This paper explores Nigeria’s path to digital financial inclusion (DFI) with experiences drawn from Firstmonie, the mobile money initiative of one of Nigeria’s oldest institutions, First Bank. Derived from public sources and interviews, we present the operating model of Firstmonie using the business model canvas (BMC) and subsequently draw insights on Nigeria’s path to DFI. While Nigeria’s mobile money adoption and performance has fallen short of expectations, the first hand experiences catalogue operator issues and challenges provides understanding of the contextual constraints of mobile money operations in Africa’s largest economy.