Payment Service Banks in Nigeria: Opportunities and Challenges
Digital financial services have a key role to play in addressing financial inclusion and creating greater economic growth, especially in countries like Nigeria where the pace of financial inclusion is slow due to significant demand-side and supply-side challenges. At the end of 2020, just over half of Nigerians were using formal financial services such as products and services provided by financial institutions that included electronic payments, savings, credit, insurance and pension schemes.
Out of the 38 million financially excluded Nigerians, 81 per cent live in rural areas, and 61 per cent use mobile phones, representing a huge opportunity to advance financial inclusion through mobile phones.
This report highlights the potential role that Payment Service Banks (PSB) can play in expanding financial inclusion within the confines of the PSB regulatory framework in Nigeria, and the opportunities and challenges for building commercially viable PSB operations.
The report also provides key lessons from the experiences of payments banks in India, which are similar to PSBs in Nigeria in terms of the licensing framework. It identifies the key enablers and challenges facing PSBs and analyses how they can scale operations via partnerships while also enhancing the value proposition for under and unbanked people.
- Resource type Report
- Year of Publication2022
- Keywords mobile money, Payment Service Banks (PSB)
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