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Why M-Pesa mobile money scheme can’t work in Nigeria

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Just as M-Pesa, Kenya’s leading African mobile money platform driven by Safaricom has flagged off expansion spree across Africa and beyond, analysts in the sector has said that it will not enter Nigeria because of the prevailing legal framework governing mobile money.

By structure, Nigerian government during the introductory time of the platform insisted that special purpose companies using infrastructure of any telecoms service provider of its choice can only be granted licences to drive the scheme and not the telecoms companies themselves as it is in Kenya.

But industry pundits say the legal framework contributed immensely in the near collapse of the payment platform since its introduction in Nigeria.

Government may had developed cold feet in allowing telecoms to drive the scheme based on the fact that majority of telecoms investors are non-indigenous then.

However, there are serious plans by M-Pesa to begin Africa wide expansion in its efforts to giving millions of people access to banking services without the need for a bank account, the CEO of Safaricom said.

Legends show that M-Pesa was set up a decade ago by Safaricom, Vodafone’s Kenyan business, and has long been expected to push further across Africa. Its technology lets users with even a basic mobile handset borrow money and save through partnerships with local banks.

M-Pesa, regulated by the Kenyan central bank, accounts for more than a quarter of Safaricom’s annual revenue, growing 21% in its year to 31 March.

This month, UK-based Vodafone, one of the world’s top telecoms operators, transferred its 35% stake in Safaricom, Kenya’s biggest company by market value, to its majority-owned SA subsidiary Vodacom.


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