Skip to main content

Advertisement

SpringerLink
Log in

Diffusion of Innovations: Mobile Money Utility and Financial Inclusion in Nigeria. Insights from Agents and Unbanked Poor End Users

  • Published:
Information Systems Frontiers Aims and scope Submit manuscript

Abstract

Despite a rigorous policy drive towards financial inclusion in Nigeria, and although the country has a high tele-density ratio, the vast unbanked largely poor remain excluded from the financial sector. Adopting a mixed method approach of the supplier and consumer sides of mobile money, using documentary analysis, focus groups, interviews, and surveys; this article relies on the diffusion of innovations theoretical framework to explore the utility of mobile money with a view to not only assess its application in the enhancement of financial inclusion, but also better tailor the current applications for these low-income users. We identify 4 factors (lack of customer demand and experimenters, lack of integration in the ecosystem, lack of trust and preference for effective local savings scheme and policy short-termism resulting in mobile money operational unsustainability) that are responsible for non-diffusion of mobile money. Our paper reveals interest dynamics that can advance a more long-term mobile money regulatory policy which takes care of the concerns of the unbanked poor.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7
Fig. 8
Fig. 9

Similar content being viewed by others

Notes

  1. Studies like Zhou and Wan (2017) have also conducted interviews for post hoc analysis of their results.

  2. To improve our research rigor, in May 2021, we conducted another round of interviews to strengthen the validity of our research findings. Also, the secondary data was updated to reflect present licensed mobile money operators’ offerings.

  3. All Nigerian Banks have mobile banking but only 9 have dedicated mobile money (agency banking) operations.

  4. The interview guide after being designed by one of the study’s researchers, was pre-tested by sharing with two experienced senior professors, one of which is involved in this study. Their reviews assisted in identifying issues previously not considered and ensured the validity and reliability of the interview data (Lichtman, 2013). After the review process, the proposed amendments were taken into account, and the final design was eventually developed.

  5. 666 is called the “number of the Beast” in chapter 13 of the Book of Revelation, of the New Testament, and also in popular culture.

  6. Language used is pidgin English.

  7. Master or boss.

  8. USD:N = 410 as at August 19, 2021.

  9. As used in this quote, 419 is a local slang for cybercrimes. (It should be noted that 419 is also the section of the Nigerian Criminal Code dealing with fraud).

  10. Yahoo Yahoo is a local slang for people who participate in cyber crime

  11. Oga is a local salutation which means Sir/Ma.

References

  • Abhipsa, P., Rahul, De’, & Tejaswini, H. (2020). The role of Mobile payment technology in sustainable and human-centric development: Evidence from the post-demonetization period in India. Information Systems Frontiers, 22(3), 607–631.

    Article  Google Scholar 

  • Abor, J. Y., Amidu, M., & Issahaku, H. (2018). Mobile telephony, financial inclusion and inclusive growth. Journal of African Business, 19(3), 430–453.

    Article  Google Scholar 

  • Adomako, S., Danso, A., & Ofori Damoah, J. (2016). The moderating influence of financial literacy on the relationship between access to finance and firm growth in Ghana. Venture Capital, 18(1), 43–61.

    Article  Google Scholar 

  • Akanfe, O., Valecha, R., & Rao, H. R. (2020). Design of an inclusive financial privacy index (INF-PIE): A financial privacy and digital financial inclusion perspective. ACM Transactions on Management Information Systems (TMIS), 12(1), 1–21.

    Google Scholar 

  • Aker, J. C., & Mbiti, I. M. (2010). Mobile phones and economic development in Africa. The Journal of Economic Perspectives, 24(3), 207–232.

    Article  Google Scholar 

  • Albashrawi, M., & Motiwalla, L. (2017). Privacy and personalization in continued usage intention of mobile banking: An integrative perspective. Information Systems Frontiers, 21, 1–13. https://doi.org/10.1007/s10796-017-9814-7

    Article  Google Scholar 

  • Al-Jabri, I. M., & Sohail, M. S. (2012). Mobile banking adoption: Application of diffusion of innovation theory. Journal of Electronic Commerce Research, 13(4), 379–391.

    Google Scholar 

  • Al-Muwil, A., Weerakkody, V., El-Haddadeh, R., & Dwivedi, Y. (2019). Balancing digital-by-default with inclusion: A study of the factors influencing E-inclusion in the UK. Information Systems Frontiers, 21(3), 635–659.

    Article  Google Scholar 

  • Arora, R. U. (2012). Financial inclusion and human capital in developing Asia: The Australian connection. Third World Quarterly, 33(1), 177–197.

    Article  Google Scholar 

  • Asongu, S. (2015). The impact of mobile phone penetration on African inequality. International Journal of Social Economics, 42(8), 706–716.

    Article  Google Scholar 

  • Asongu, S., Le Roux, S., & Biekpe, N. (2018). Enhancing ICT for environmental sustainability in sub-Saharan Africa. Technological Forecasting and Social Change, 127, 209–216.

    Article  Google Scholar 

  • Asongu, S., Biekpe, N., & Cassimon, D. (2020). Understanding the greater diffusion of mobile money innovations in Africa. Telecommunications Policy, 44(8), 102000.

    Article  Google Scholar 

  • Asongu, S., Agyemang-Mintah, P., & Nting, R. (2021). Law, mobile money drivers and mobile money innovations in developing countries. Technological Forecasting and Social Change, 168, 120776,ISSN 0040-1625. https://doi.org/10.1016/j.techfore.2021.120776

    Article  Google Scholar 

  • Asongu, S. A., & Nwachukwu, J. C. (2016). The role of governance in mobile phones for inclusive human development in Sub-Saharan Africa. Technovation, 55, 1–13.

  • Behl, A., & Pal, A. (2016). Analysing the barriers towards sustainable financial inclusion using Mobile banking in rural India. Indian Journal of Science and Technology, 9(15). https://doi.org/10.17485/ijst/2016/v9i15/92100

  • Beuermann, D. W., McKelvey, C., & Vakis, R. (2012). Mobile phones and economic development in rural Peru. The Journal of Development Studies, 48(11), 1617–1628.

    Article  Google Scholar 

  • Braun, V., Clarke, V., Boulton, E., Davey, L., & McEvoy, C. (2020). The online survey as a qualitative research tool. International Journal of Social Research Methodology, 1–14. https://doi.org/10.1080/13645579.2020.1805550

  • Carbó S., Gardener E.P.M., & Molyneux P. (2005). Financial exclusion in developing countries. In: Financia Exclusion. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, London.

  • Choudary, S. P. (2013). Platform Power (pp. 1–84). [online] Available: http://platformed.info

  • Creswell, W. J. (2003). Research design-qualitative, quantitative and mixed methods approaches (Second ed.). Sage Publications.

  • Cruz-Jesus, F., Oliveira, T., & Bacao, F. (2017). Assessing the pattern between economic and digital development of countries. Information Systems Frontiers, 19(4), 835–854.

    Article  Google Scholar 

  • David-West, O., Iheanachor, N., & Umukoro, I. O. (2020). Sustainable business models for the creation of mobile financial services in Nigeria. Journal of Innovation & Knowledge, 5(2), 105–116.

    Article  Google Scholar 

  • Demirgüç-Kunt, A., Klapper, L., Singer, D., Ansar, S., & Hess, J. (2020). The global Findex database 2017: Measuring financial inclusion and opportunities to expand access to and use of financial services. The World Bank Economic Review, 34(Supplement_1), S2-S8.

  • Denzin, N. K., & Lincoln, Y. S. (2005). The Sage handbook of qualitative research (Third ed.). Sage Publications.

  • Donner, J., & Tellez, C. A. (2008). Mobile banking and economic development: Linking adoption, impact, and use. Asian Journal of Communication, 18(4), 318–332.

    Article  Google Scholar 

  • Enhancing Financial Innovation & Access (EfinA). (2018). EFInA Access to Financial Services in Nigeria Survey. Access to Financial Services in Nigeria survey – EFInA: Enhancing Financial Innovation and Access. Accessed 28 May 2021.

  • Gao, L., & Waechter, K. A. (2017). Examining the role of initial trust in user adoption of mobile payment services: An empirical investigation. Information Systems Frontiers, 19(3), 525–548.

    Article  Google Scholar 

  • Ghosh, S. (2016). Does mobile telephony spur growth? Evidence from Indian states. Telecommunications Policy, 40(10), 1020–1031.

    Article  Google Scholar 

  • GSMA. (2020). The mobile economy West Africa 2019. London, UK: Author. https://www.gsma.com/mobileeconomy/wpcontent/uploads/2020/03/GSMA_MobileEconomy2020_West_Africa_ENG.pdf. Accessed 28 May 2021.

  • Guardian Newspapers (2017). Fitch affirms Nigerian banks’ profitability. Guardian Newspapers, April 10, 2017. Accessed 30 May 2021.

  • Guest, G., Namey, E., & McKenna, K. (2017). How many focus groups are enough? Building an evidence base for nonprobability sample sizes. Field Methods, 29, 3–22. https://doi.org/10.1177/1525822X16639015

    Article  Google Scholar 

  • Gumel, A., & Othman, M. (2013). Reflecting customers’ innovativeness and intention to adopt islamic banking in Nigeria. Business Management Quarterly Review, 4(3 & 4), 27–37.

    Google Scholar 

  • Howcroft, B., Hamilton, R., & Hewer, P. (2007). Customer involvement and interaction in retail banking: An examination of risk and confidence in the purchase of financial products. Journal of Services Marketing, 21(7), 481–491.

    Article  Google Scholar 

  • IFC (2018). Digital Access: The Future of Financial Inclusion in Africa. Available at 201805_Digital-Access_The-Future-of-Financial-Inclusion-in-Africa_v1.pdf (ifc.org). Accessed 28 May 2021.

  • Jack, W. & Suri, T. (2014). Risk sharing and transactions costs: Evidence from Kenya's mobile money revolution. The American Economic Review, 104(1), 183-223.

  • Kapoor, K., Dwivedi, Y.K., & Williams, M.D. (2013). Role of Innovation Attributes in Explaining the Adoption Intention for the Interbank Mobile Payment Service in an Indian Context In: Dwivedi Y.K., Henriksen H.Z., Wastell D., De’ R. (eds) Grand Successes and Failures in IT. Public and Private Sectors. TDIT 2013. IFIP advances in information and communication technology, vol 402. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-38862-0_13.

  • Kemal, A. A. (2019). Mobile banking in the government-to-person payment sector for financial inclusion in Pakistan. Information Technology for Development, 25(3), 475–502.

    Article  Google Scholar 

  • Kinard, B., & Capella, M. (2006). Relationship marketing: The influence of consumer involvement on perceived service benefits. Journal of Services Marketing, 20(6), 359–368.

    Article  Google Scholar 

  • Kingiri, A. N., & Fu, X. (2020). Understanding the diffusion and adoption of digital finance innovation in emerging economies: M-Pesa money mobile transfer service in Kenya. Innovation and Development, 10(1), 67–87.

    Article  Google Scholar 

  • Koomson, I., Villano, R., & Hadley, D. (2020). Effect of financial inclusion on poverty and vulnerability to poverty: Evidence using a multidimensional measure of financial inclusion. Social Indicators Research, 25(4), 375–387.

    Google Scholar 

  • Koomson, I., Bukari, C., & Villano, R. (2021). Mobile money adoption and response to idiosyncratic shocks: Empirics from five selected countries in sub-Saharan Africa. Technological Forecasting and Social Change, 167(2021), Article 120728.

    Article  Google Scholar 

  • Kotler, P., & Amstrong, G. (2001). Principles of marketing (9th ed.). Prentice Hall.

    Google Scholar 

  • Kumari, N., & Khanna, J. (2017). Cashless payment: A behaviourial change to economic growth. International Journal of Scientific Research and Education, 5(7), 6701–6710.

    Google Scholar 

  • Lapukeni, A. F. (2015). Financial inclusion and the impact of ICT: An overview. American Journal of Economics, 5(5), 495–500.

    Google Scholar 

  • Lashitew, A. A., van Tulder, R., & Liasse, Y. (2019). Mobile phones for financial inclusion: What explains the diffusion of mobile money innovations? Research Policy, 48(5), 1201–1215.

    Article  Google Scholar 

  • Lepoutre, J., & Oguntoye, A. (2018). The (non-) emergence of mobile money systems in sub-Saharan Africa: A comparative multilevel perspective of Kenya and Nigeria. Technological Forecasting and Social Change, 131, 262–275.

    Article  Google Scholar 

  • Lichtman, M. (2013). Qualitative research in education a user’s guide (3rd ed.). SAGE Publications Ltd.

    Google Scholar 

  • Lin, H. F. (2011). An empirical investigation of mobile banking adoption: The effect of innovation attributes and knowledge-based trust. International Journal of Information Management, 31, 252–260.

    Article  Google Scholar 

  • Mas, I., & Morawczynski, O. (2009). Designing mobile money services lessons from M PESA. Innovations, 4(2), 77–91.

    Article  Google Scholar 

  • Mas, I., & Radcliffe, D. (2011). Scaling mobile money. Journal of Payments Strategy & Systems, 5(3), 298–315.

    Google Scholar 

  • McGrath, C., Palmgren, P., & Liljedahl, M. (2019). Twelve tips for conducting qualitative research interviews. Medical Teacher, 41(9), 1002–1006.

    Article  Google Scholar 

  • Medhi, I., Ratan, A., & Toyama, K. (2009). Mobile-banking adoption and usage by low-literate, low-income users in the developing world, in proceedings of Human Computer Interaction International, San Diego, USA, 2009.

  • Mian, T. S., & Rizwan, M. (2013). Determinants of customer intention to use mobile banking: An empirical research based on extended technology acceptance model. Journal of Basic and Applied Scientific Research, 3(11), 201–211.

    Google Scholar 

  • Mitton, L. (2008). Financial inclusion in the UK: Review of policy and practice. Joseph Rowntree Foundation.

    Google Scholar 

  • Mütterlein, J., Kunz, R., & Baier, D. (2019). Effects of lead-usership on the acceptance of media innovations: A mobile augmented reality case. Technological Forecasting and Social Change, 145, 113–124.

    Article  Google Scholar 

  • Neaime, S., & Isabelle, G. (2018). Financial inclusion and stability in MENA: Evidence from poverty and inequality. Finance Research Letters, 24, 230–237.

    Article  Google Scholar 

  • Ngugi, B., Pelowski, M., & Ogembo, J. G. (2010). M-PESA: A case study of the critical early adopters’ role in the rapid adoption of Mobile money banking in Kenya. The Electronic Journal of Information Systems in Developing Countries, 43(3), 1–16.

    Article  Google Scholar 

  • Nigerian Communications Commission (2021) Monthly subscriber data (March 2021). Nigerian Communications Commission [Online] http://www.ncc.gov.ng/ Accessed 18 May 2021.

  • Noble, H., & Heale, R. (2019). Triangulation in research, with examples. Evidence-Based Nursing, 22, 67–68.

    Article  Google Scholar 

  • Ogunlesi, T., & Busari, S. (2012). Seven ways mobile phones have changed lives in Africa. CNN. Available online at http://www.cnn.com/2012/09/13/world/africa/mobile-phones-change-africa

  • Osei-Assibey, E. (2015). What drives behavioral intention of mobile money adoption? The case of ancient susu saving operations in Ghana. International Journal of Social Economics, 42(11), 962–979.

    Article  Google Scholar 

  • Ozili, P. K. (2020). Financial inclusion research around the world: A review. In Forum for social economics (pp. 1-23). Routledge.

  • Pal, A., De’, R., & Herath, T. (2020). The role of Mobile payment technology in sustainable and human-centric development: Evidence from the post-demonetization period in India. Information Systems Frontier, 22, 607–631.

    Article  Google Scholar 

  • Pearce, D. (2011). Financial Inclusion in the Middle East and North Africa: Analysis and Roadmap Recommendations. Policy Research Working Paper 5610, The World Bank Middle East and North Africa Region Financial and Private Sector Development Unit. March, 2011.

  • Pénicaud, C., & Katakam, A. (2019). State of the industry 2013: Mobile financial services for the unbanked. Gates Open Res., p. 3.

  • Ritchie, J., & Lewis, J. (2006). Qualitative research practice - a guide for social science students and researchers. Sage publications.

    Google Scholar 

  • Rogers, E. M. (1983). Diffusion of innovation (3rd ed). Free Press.

    Google Scholar 

  • Rogers, E., & M. (1962). Diffusion of innovations (1st ed.). Free Press.

    Google Scholar 

  • Schmidt, E., & Cohen, J. (2010). The digital disruption-connectivity and the diffusion of power. Foreign Affairs, 89(6), 75–85.

    Google Scholar 

  • Seethamraju, R., Diatha, K. S., & Garg, S. (2018). Intention to use a Mobile-based information technology solution for tuberculosis treatment monitoring–applying a UTAUT model. Information Systems Frontiers, 20(1), 163–181.

    Article  Google Scholar 

  • Sewell, M. (2008). The use of qualitative interviews in evaluation. The University of Arizona Tucson.

    Google Scholar 

  • Sim, J., Saunders, B., Waterfield, J., & Kingstone, T. (2018). Can sample size in qualitative research be determined a priori? International Journal of Social Research Methodology, 21(5), 619–634. https://doi.org/10.1080/13645579.2018.1454643

    Article  Google Scholar 

  • Sirgy, M., Lee, D., Johar, J. S., & Tidwell, J. (2008). Effect of self-congruity with sponsorship on brand loyalty. Journal of Business Research, 61, 1091–1097.

    Article  Google Scholar 

  • Tam, C., Santos, D., & Oliveira, T. (2020). Exploring the influential factors of continuance intention to use mobile apps: Extending the expectation confirmation model. Information System Frontiers, 22, 243–257.

    Article  Google Scholar 

  • Tobbin, P., & Kuwornu, J. K. (2011). Adoption of mobile money transfer technology: Structural equation modelling approach. European Journal of Business and Management, 3(7), 59–77.

    Google Scholar 

  • United Nations (2018). UN CountryStats. http://data.un.org/en/index.html. Accessed 2 Sept 2020.

  • Van der Boor, P., Oliveira, P., & Veloso, F. (2014). Users as innovators in developing countries: The global sources of innovation and diffusion in mobile banking services. Research Policy, 43(9), 1594–1607.

    Article  Google Scholar 

  • Wamuyu, P. K. (2014). The role of contextual factors in the uptake and continuance of mobile money usage in Kenya. The Electronic Journal of Information Systems in Developing Countries, 64(1), 1–19.

    Article  Google Scholar 

  • Wani, M., Raghavan, V., Abraham, D., & Kleist, V. (2017). Beyond utilitarian factors: User experience and travel company website successes. Information Systems Frontiers, 19(4), 769–785.

    Article  Google Scholar 

  • Waweru, N. (2014). Factors influencing quality corporate governance in sub Saharan Africa: An empirical study. Corporate Governance, 14(4), 555–574.

    Article  Google Scholar 

  • Wentzel, J., Diatha, K., & Yadavalli, V. (2016). An investigation into factors impacting financial exclusion at the bottom of the pyramid in South Africa. Development Southern Africa, 33(2), 203–214.

    Article  Google Scholar 

  • Wijeratne, M., & Silva, N. D. (2014). Mobile phone intervention for Sri Lankan mushroom producers. Asian Association of Open Universities Journal, 9(1), 57–63.

    Article  Google Scholar 

  • Zhou, Y. M., & Wan, X. (2017). Product variety and vertical integration. Strategic Management Journal, 38(5), 1134–1150.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Lagos Business School, Pan-Atlantic University, 20, Lekki-Epe Expressway, Lagos, Nigeria

    Olayinka David-West

  2. School of Management and Social Sciences, Pan-Atlantic University, 52, Lekki-Epe Expressway (Near Eleko Beach Junction), Ibeju-Lekki, Lagos, Nigeria

    Oluwasola Oni

  3. School of Strategy and Leadership, Faculty of Business and Law, Coventry University, Coventry, CV1 5DL, UK

    Folajimi Ashiru

Authors
  1. Olayinka David-West
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Oluwasola Oni
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Folajimi Ashiru
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Folajimi Ashiru.

Ethics declarations

Conflict of interests

The authors declare that they have no conflict of interests

Additional information

Publisher’s Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Supplementary Information

ESM 1

(DOCX 78 kb)

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

David-West, ., Oni, O. & Ashiru, F. Diffusion of Innovations: Mobile Money Utility and Financial Inclusion in Nigeria. Insights from Agents and Unbanked Poor End Users. Inf Syst Front (2021). https://doi.org/10.1007/s10796-021-10196-8

Download citation

  • Accepted:

  • Published:

  • DOI: https://doi.org/10.1007/s10796-021-10196-8

Keywords

Search

Navigation