Nigeria: Cash-Less Policy – Glo Blazes Another Trail

Sep 2014
Nigeria, September, 02 2014 - About two weeks ago, the company unveiled the GloXchange at a special launch in Lagos. TheGloXchange, which is expected to boost the nation’s cashless policy was launched in partnership with three licensed mobile money agents Firstmonie, Ecobank and IBTC.

When Globacom launched its services in 2003, few gave it a chance to survive in the telecommunications industry that was already dominated by the two companies that were earlier licensed two years before its arrival. The company did not only survive, but it has also come to be associated with innovations and groundbreaking firsts, which have made it the darling of many Nigerians. Many would recall the Per Second Billing and the SIM for N1 Naira sagas in the country among many other trailblazing innovations of the country’s national telecom carrier. The rain has not stopped for this behemoth and it has added another innovation in its usual manner.

About two weeks ago, the company unveiled the GloXchange at a special launch in Lagos. TheGloXchange, which is expected to boost the nation’s cashless policy was launched in partnership with three licensed mobile money agents Firstmonie, Ecobank and IBTC.

At the launch of the platform, chief executives of the Central Bank of Nigeria (CBN) and the partner banks were effusive of the power of the network to boost financial inclusion and take financial services to the grassroots.

Director of Banking and Payments, Systems Department of the CBN, Mr Dipo Fatokun said the initiative marked the beginning of the deeper collaboration between the financial industry and the telecommunications sector.

He congratulated Globacom for launching the first mobile money Super-Agent Network in Nigeria, saying it was a win-win situation for all stakeholders.

Globacom’s Head of Corporate Sales, Mr Kamal Shonibare, said GloXchange would avail the mobile money sector of the much-needed agent network across the entire country, as well as the technology platform required for seamless mobile money transactions.

He said the initiative would provide the partner banks on the project with the telecom company’s extensive network of 150 Glo World &Glo Zone shops, over 35,000 Glo dealer and sub dealer outlets and over 400 Conoil filling stations across the country. He added that this has positioned the GloXchange platform for phenomenal success from its first day of operation.

“The obvious push to reduce the physical movement of cash during business transactions in the economy has stimulated the “marriage” between telecoms operators and the banks, which invariably led to the birth of GloXchange,” he remarked.

He said GloXchangeoffers a robust platform to provide mobile money service to both banked and unbanked Nigerians, enabling existing and potential customers of partner banks to carry out transactions under the three key areas of banking transactions – deposits, withdrawals and transfers.

Based on the agreement with the partner banks, Globacomwould recruit mobile money agents, train them and also provide management services for the partner banks, making available its network infrastructure to support mobile financial transactions. Glowould also provide a dedicated helpline for customers to make inquiries about mobile money services.

The banks, on their part, would provide their mobile money platforms to Globacom’s mobile subscribers in compliance with the CBN’s policy on mobile money. They would also provide specialised trading platform and merchandising materials to the recruited agents while managing customer accounts and support services.

Speaking at the launch event, the Managing Director of Firstmonie, Mike Ogbalu said that GloXchange would make financial services available to more Nigerians especially at the grassroots, corroborating the Ecobank’s Executive Director, Kingsley Aigbokhaevo’s assertion that the network, through GloXchange, would drive financial inclusion in the country.

Aigbokhaevo cited the example of the Conditional Cash Transfer programme of the Federal Government as one of the ways in which mobile money is already impacting positively on the lives of the common people through Globacom.

He disclosed that under GloXchange platform, Ecobank mobile money wallet, hosted on Glo Mobile lines, is already being used to disburse monthly subvention to beneficiaries.

He also disclosed that youth farmers in Ekiti State are also receiving subsidies through the same means.

Speaking on behalf of StanbicIBTC, Executive Director, MrObinnaAbajue said his bank was proud to be associated with Globacom because “Glo, in its characteristic manner, has provided the bridge that will deliver true financial inclusion in Nigeria”.

Also, prominent economists, Dr Ayo Teriba and Bismarck Rewane, have said that the introduction of a massive, nationwide, collaborative mobile money agent network in the country by Globacom, in partnership with licensed mobile money operators, would create thousands of jobs in the Nigerian economy.

Dr Teriba, Chief Executive Officer of Economic Associates, who spoke during the launch of the platform, noted that while Mobile Money service has been in Nigeria for over three years, it has failed to grow as expected because of certain reasons, including lack of an efficient and expansive agent network. He said this lack of a viable and massive agent network has limited its benefits to the economy, especially in terms of job creation.

“Usually for such a service as mobile money, the bigger the network, the higher the chances of an explosion, and by extension, the bigger the benefits accruable to all the stakeholders, from the banks down to the customers,” he said. He added that GloXchange, with the nationwide network of agents as unveiled by Globacom, is just the ingredient the industry has been waiting for.

Dr Teriba noted that the potential for growth for the initiative is immense as the platform is open to other banks to plug into. He implored Nigerians looking for employment opportunities to see the avenues created by the initiative and utilise them for self-enhancement.

Mr Rewane, Chief Executive Officer of Financial Derivatives Company Limited, who also spoke at the launch of the platform, said the initiative was consistent with the CBN’s policy trust of developing and sustaining an efficient payment system that would drive an increase in the velocity of money and consequently, stimulate economic growth.

He described Nigeria as a mineral-rich and commodity-dependent economy with a nominal GDP of $510bn. According to him, it is 12 times the size of Kenya’s economy which has profited massively from mobile money service. He said Nigeria is the largest economy in Africa and the 26th largest in the world.

Rewane, however, said that the economy is largely cash-based; a situation which, he said constitutes a barrier to rapid growth. He added that initiatives such as GloXchange that helps to enhance the cashless policy of the CBN, or that help to improve the velocity of money is bound to have a resounding positive impact on economic growth.

Expatiating further, Rewane said the potential GDP growth rate in Nigeria is 11 percent, whereas the actual GDP growth rate as discerned from the rebasing exercise recently carried out by the Federal Government is six per cent. He said since people do not live on potential but actuals, it is of utmost importance to implement policies that would help Nigeria to actualise the potential growth rate.

One veritable way of achieving this, he said, is to capture the money lying outside the formal sector. According to him, over 46 per cent of Nigerian adults currently have no access to financial services.

He said Mobile money is a strong tool for financial inclusion of this huge category of Nigerians, stressing that initiatives such as GloXchange, which will help with the acceleration of mobile money service is therefore highly commendable.

He added that GloXchangewould contribute to the efficiency of Nigeria’s payment systems, lead to more efficient transactions and open a floodgate of opportunities for a lot of stakeholders from the top to the bottom of the mobile money value chain.


Research Analysis Tools

The fund indexes, institution benchmarks and other market information displayed here are all Symbiotics designed analysis tools, created in-house by our analysts and experts. Symbiotics has one of the oldest track records in microfinance investment analysis dating back to the late 1990s; its indexes and benchmarks have been regularly used as markers by investors, asset managers, financial institutions and practitioners. These, as well as several other research products, are available through the Research Account. Click on the link below to find out more.

Learn More