Connecting rural Nigerians to financial services

In May 2020, a small shop on the outskirts of Lagos, Nigeria, put up some posters advertising a new product. The ads described a mobile wallet that allowed users to access banking services through their smartphones.

Within minutes, customers were inquiring about the offer.

More than half of adults in Africa’s most populous country have a bank debit card. But there are few ATMs, so getting cash can be time-consuming. 

During the lockdowns and bank closures imposed during COVID, getting cash became nearly impossible. 

In response, Huawei worked with fets, Nigeria’s top supplier of mobile money services. (fets stands for Funds and Electronic Transfer Solutions.)

Drawing from Huawei’s experience with mobile money in China, fets developed a solution tailored to the needs of Nigerians. Although it hasn’t changed the country’s cash-based economy, it’s made withdrawing money much easier. 

The solution lets cardholders withdraw cash not just from ATMs but also from designated agents in shops equipped with point-of-sale (POS) terminals. By scanning a code with their phones, users can withdraw cash from their bank accounts. In return for the service, licensed shops earn a handling fee. 

While fets already provided mobile money services, the critical upgrade made during COVID allowed settlements to be made in real time, rather than two days later as used to be the case. Instant settlement makes things far easier for consumers, shops, and banks. It has also opened the way for a broader adoption of mobile money in Nigeria.

fets and Huawei launched the solution in the early days of the pandemic. By April 2020, they had deployed hundreds of POS terminals, mostly in the southeast, where Lagos is located. By the end of 2020, a total of 3,000 POS terminals were deployed, serving 2 million users.

Expanding the service

In Nigeria, the government provides welfare payments to families in need. During the pandemic, it also launched a relief fund to support those whose income had plummeted as a result of the lockdowns.

But money was transferred directly into the debit cards of recipients, who then faced the challenge of accessing the cash. To solve the problem, fets and Huawei sent teams to rural communities. Those teams were equipped with POS terminals—and armored trucks full of cash. In 2020, they distributed money to hundreds of thousands of families.

COVID cash distribution

The fets system has changed the lives of many Nigerians.

Olaide, who lives in the state of Kano in the north, used to travel 10 kilometers to withdraw money sent by her husband, who was working in Lagos. In addition to being inconvenient, carrying large amounts of cash was unsafe.

Not anymore. "The fets agent is right in our village, so withdrawing money is now both convenient and safe," says Olaide.

Meanwhile, the terminal franchisees are also satisfied. "We not only earn decent agent fees, but as more people come visit us to withdraw money, our business grows,” says Yusuf, a fets service provider. “Our shop now earns twice as much as before."

One of the lasting effects of the pandemic in Nigeria will be positive. Not only is it far easier to withdraw cash than it used to be, but more financial transactions are becoming cashless as well.

In the future, utilities and cable TV providers will accept mobile payments, which will be a big change for Nigerian households. Learn more by watching this video.