Despite the growth of mobile money in Nigeria, women prefer traditional saving systems such as Ajo, GSMA has disclosed.
The 2024 report on “Women’s Trust of Mobile Money and Agents in Nigeria and Senegal’, revealed that trust in mobile money and agents is a substantial barrier to the ownership and usage of mobile money among women in Nigeria and Senegal.
It said, “While some women use mobile wallets, most opt for the familiarity and trust embedded in informal savings groups such as Ajo.”
Access to mobile money is critical to improving financial inclusion, the Global Association for Telecommunication Firms noted. Trust in a mobile money platform centres around its functionality and security. This trust can be influenced by features such as real-time payment notifications and allowances to cancel or reverse erroneous transactions, GSMA highlighted.
“In Nigeria, frequent service downtime compels some female users to promptly withdraw funds when rumours of service interruptions start circulating. Many female users also limit the amount of money kept in their accounts as a precaution,” it said.
The lack of this trust is motivating women to trust traditional savings platforms. “As a businessperson, using kolo can be wrong because any time you need money, you can easily return to it and get all your money. But for daily, weekly, or monthly contributions, you must wait until the month’s end. So, that’s why I prefer Ajo,” one female trader said.
“Ajo has fit into both traditional and modern banking methods. Despite the population of aged people enrolling, you still find vibrant and enlightened youth marking papers daily. I sell food here with my husband, and I know how much we save daily from Ajo,” Faith Ugba, a food seller at Liasu, Ilewe, told BusinessDay.
According to Ugba, the system has also helped many low-income earners to set savings targets.
“Many people I know with little income also survive with this mode. I have a tailor friend who introduced me to this banking system that contributes 3,000 daily, and I can tell you she is paying her bills. She doesn’t have a bank account but has trusted this system over the years. The savings system helps in cutting down expenses and building self-discipline. When you have an account in the bank, you might be forced to withdraw at any given time, but this is different because you have already set a project out,” she said.
Nigeria is a largely unbanked country. According to the Nigeria Inter-Bank Settlement System, the number of bank accounts with Bank Verification Numbers is currently at 60.5 million. At the same time, the country’s adult population stands at 124 million.
The percentage of the Unbanked population in Nigeria is estimated at over 28,9 million, according to data from Enhancing Financial Innovation and Access. According to a 2023 GSMA survey, out of the estimated 106 million female population in Nigeria, only 9 percent use mobile money services.
