Mobile money refers to the use of mobile phones for financial transactions. Progress in mobile communications technology and encryption systems has changed the economics of financial service provision, particularly in remote areas, rapidly expanding the number of people able to access these services. Mobile money in Nigeria has grown exponentially in recent years.
Over 80% of adult Nigerians have access to feature phones, enabling them to use mobile banking services to access loans. 28% of all Nigerian adults report having borrowed airtime from mobile network operators and of those that are currently borrowing, 20 million (65%) own mobile phones according to the EFInA.
Mobile phone penetration in Nigeria has a positive correlation with informal financial development. Given the low density of physical banking access points, increased access to mobile money has reduced delivery cost of financial services, and has increased financial inclusion particularly among female-headed households.
While uncertainties remain over some of the implications of using mobile banking services ranging from regulatory approaches, security concerns, the lack of human interfaces, to the difficulty of complying with Know Your Customer rules the retail network, speed of service, and affordability of mobile banking transactions holds a tremendous potential to expanding access to the formally financially excluded.
The Central Bank of Nigeria does not allow a Telco-led model for mobile banking in Nigeria, it must be directed by a financial institution. This has led to bottlenecks in the expansion of mobile loans as the Telcos have the competitive advantage to boost mobile money loans. Another hindrance to its growth is the Maximum transaction limits on mobile money range from N3000 to N100000, depending upon the level of required Know Your Customer rules.
Mobile money platform
USSD technology facilitates sessions of communication that is used for mobile money. It is an acronym for unstructured supplementary service data that transmits information through GSM network channels
You must have a bank account linked to your mobile telephone number to perform a USSD transaction. You don’t need to go to a bank to register for the USSD code. Registration is done with your mobile phone as long as you have your Biometric Verification Number (BVN). The borrower can only use the registered particular SIM card/telephone number.
Nigeria USSD banking codes
| Commercial Banks | USSD Code |
| Guarantee Trust Bank | *737# |
| Fidelity Bank | *770# |
| First Bank | *894# |
| Wema Bank | *945# |
| Skye Bank | *833# |
| Sterling Bank | *822# |
| Diamond Bank | *710# |
| Eco Bank | *326# |
| Zenith Bank | *966# |
| FCMB | *389# |
| Unity Bank | *7799# |
| UBA Bank | *919# |
| Union Bank | *826# |
| Heritage Bank | *322# |
| Keystone Bank | *533# |
| Access Bank | *901# |
Advantages of mobile money
For Borrowers
- The loans can be sourced using a feature phone
- It does not need an Internet connection to access loans.
- Fast and easy application process
- Mobile loan payments are just as safe as bank transfers, since they’re regulated by the CBN.
Disadvantages of mobile money
For Borrowers
- Once a mobile money loan on USSD is initiated it cannot be stopped or cancelled. This is unlike an online transaction done via a laptop or mobile where it can be cancelled after initiation
- Telecom operator will charge some minimal fees on the same. This fee will be charged even if your transaction doesn’t go through
- You should be registered for mobile banking with your bank before you have to access the loan facility.
- There is a limit on the size of loan possible depending on the Know Your Customer policy of the lender.
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