Welcome to our exclusive interview with Ebehijie Momoh, the Country Manager and Area Business Head, West Africa at Mastercard. In this interview, we will be exploring the critical topic of empowering small businesses to access financial and digital payments, with a particular focus on women and youth entrepreneurship in Nigeria. With millions of small businesses driving the country’s economy, it is vital that we find ways to overcome the barriers that limit their access to financial services and digital payment solutions. Mrs. Momoh is an expert in the field of financial inclusion, innovation, and technology, and has been working to develop innovative solutions to help small businesses in Nigeria thrive. In this interview, she will share her insights on the challenges faced by small businesses, how digital banking institutions can collaborate with stakeholders to improve access to financial services and digital payment solutions, and the impact of increased access on the Nigerian economy. We are excited to dive into this discussion with Mrs. Momoh and to learn more about how we can empower small businesses to achieve their full potential.
(DBA) Can you tell us more about the challenges faced by small businesses, especially women and youth entrepreneurs, in accessing financial services and digital payment solutions in Nigeria?
(EM) Small enterprises, particularly those owned by women and young entrepreneurs, encounter various obstacles when seeking financial services and digital payment solutions in Nigeria. Small businesses play a significant role in the Nigerian economy, with their successes and setbacks having a ripple effect that impacts countless lives and local communities in lasting ways.
The high youth unemployment rate in the country often leaves starting a small business as the only viable means of creating a livelihood. The World Bank has estimated that SMEs are accountable for 77% of all jobs in Africa and contribute up to half of GDP in some countries, yet their access to finance is among the lowest in the world. Arising from this, data from IMF reflects that 47 African nations found that women are more prone to opt-out of loan offers due to low perceived creditworthiness.
Access to credit, high use of cash, infrastructure limitations, and power supply interruptions are some of the challenges faced by small businesses in Nigeria. On the one hand, brick-and-mortar shop owners are quickly adjusting their companies to online platforms to save costs and maintain operations. On the other hand, many are trying to learn about e-commerce with limited resources, while others are figuring out the logistics and operations to get their products in the hands of consumers.
COVID-19 has also resulted in shifts in consumer behaviour, and small merchants will need to adjust to them accordingly to stay afloat. There has been a move from in-person to online payments, and from cash to contactless, amidst social distancing recommendations following the pandemic.
Cybercrime has been on the rise, and there are pressures on cash flow.
Finally, small businesses are making important decisions and changes to their daily operations, and are, therefore, in great need of data, analytics, and insights to help them navigate this uncertainty.
(DBA) What innovative solutions has Mastercard developed to help small businesses, particularly women and youth entrepreneurs, access financial services and digital payment solutions in Nigeria?
(EM) At Mastercard, we have made a global commitment to bring 50 million micro and small businesses into the digital economy by 2025, with a direct focus on providing 25 million women entrepreneurs with solutions that can help them grow their business.
We have also created several platforms to help Nigeria’s digital-savvy youths launch their businesses online. These include Simplify Commerce, which helps businesses get online and easily take payments across multiple channels from one single platform. Customers can create their online store, accept digital payments, manage invoices, and minimise fraud via a single portal. The technology enables merchants to reach more consumers, including those from international markets, as well as promote products via social media. There’s also the SME in a Box and Merchant Digital solutions that enable small businesses to tap into digital payments. Our existing partnerships with Airtel allow small business owners to receive a wide range of payments safely and securely and purchase from suppliers abroad and pay with our virtual payment solution.
For example, Mastercard, in partnership with Unilever, launched Jaza Duka, a digital lending platform in Kenya that aims to unlock credit for millions of small businesses. The program tracks the purchase history of small business owners who buy Unilever products and combines this data with Mastercard analytics to provide micro-credit eligibility recommendations to the Kenya Commercial Bank, who provide interest-free credit lines to eligible businesses. The program has over 20,000 participating stores in Kenya. The Jaza Duka program holds immense potential to reach millions of small business owners worldwide, particularly the 70% of women-owned businesses in the developing world that struggle with limited access to adequate financing. In Kenya alone, the Jaza Duka program has already disbursed over $15.7 million in credit to small business owners, with a repayment rate of over 90%. This outstanding repayment rate suggests that small business owners are utilising the credit effectively and benefiting significantly from the program. In a 2020 survey conducted by Mastercard and Unilever, the Jaza Duka program was found to have a positive impact on small businesses in Kenya, with 86% of respondents reporting an increase in sales and 69% reporting business growth. These findings clearly demonstrate that the Jaza Duka program is successfully achieving its goal of helping small business owners flourish and prosper.
Mastercard teamed up with MTN, a mobile network operator in Africa, to bring more digital services to MTN’s platform. This work adds data analytics and payment tools right on the phones of local entrepreneurs, helping them manage their businesses.
These are just a few examples of how Mastercard is driving financial and digital inclusion with the goal of creating a digital economy that works for everyone, everywhere.
(DBA) How can digital banking institutions collaborate with the government and other stakeholders to improve access to financial services and digital payment solutions for small businesses in Nigeria?
(EM) Digital banking institutions are at the forefront of the financial services industry, leveraging technology to provide innovative solutions that meet the needs of their customers. They are driving financial inclusion and empowering individuals and businesses with access to affordable and convenient financial services, which is critical for economic growth and development. Digital banking institutions are transforming the financial landscape, and Mastercard is proud to partner with them to create a more inclusive and sustainable future for all.
Digital banking institutions can collaborate with the Nigerian government and other stakeholders to improve access to financial services and digital payment solutions for small businesses in Nigeria by taking the following steps:
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Partner with government agencies: Digital banking institutions can partner with regulatory agencies such as the Central Bank of Nigeria (CBN) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) to increase awareness of their services and improve access to financial services and digital payment solutions for small businesses.
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Develop tailored solutions: Digital banking institutions can work with small businesses to develop tailored financial products and services that meet their unique needs. This can include loans, savings accounts, and digital payment solutions that are easy to use and accessible.
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Expand their reach: Digital banking institutions can expand their reach by collaborating with other stakeholders such as mobile network operators, fintech companies, and trade associations to increase awareness of their services and reach more small businesses.
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Provide financial education: Digital banking institutions can provide financial education and training to small businesses to help them better understand financial products and services and how to use them effectively.
By collaborating with the government and other stakeholders, digital banking institutions can play a critical role in improving access to financial services and digital payment solutions for small businesses in Nigeria, which can help drive economic growth and improve the lives of millions of Nigerians.
(DBA) What role does financial education play in improving access to financial services and digital payment solutions for small businesses in Nigeria, and how can digital banking institutions support this effort?
(EM) Financial education plays a critical role in promoting financial inclusion and empowering small businesses in Nigeria. With the rise of digital payment solutions, it is important that small businesses are equipped with the knowledge and skills needed to effectively manage their finances and take advantage of these innovative technologies. Digital banking institutions can support financial education efforts in several ways, including:
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Partnering with local organisations: Digital banking institutions can partner with local organisations such as trade associations, non-profits, and community-based organisations to deliver financial education programs to small businesses.
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Developing educational resources: Digital banking institutions can develop educational resources such as online courses, webinars, and training materials to help small businesses learn about financial products and services and how to use them effectively.
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Offering financial coaching and support: Digital banking institutions can offer financial coaching and support to small businesses to help them navigate financial challenges and make the most of digital payment solutions.
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Promoting financial literacy: Digital banking institutions can promote financial literacy through marketing and advertising campaigns that highlight the benefits of using digital payment solutions.
Mastercard is committed to supporting financial education initiatives in Nigeria through partnerships with government agencies, non-profits, and other stakeholders. We believe that by providing small businesses with access to financial education, we can help them better understand financial products and services and make informed decisions about managing their finances.
Technology plays a critical role in creating more inclusive financial services and digital payment solutions for small businesses in Nigeria. Artificial intelligence, for instance, has the potential to revolutionise the way small businesses access financial services and make digital payments.
With Artificial Intelligence, small businesses can better understand their customers and their purchasing behaviour. By analysing large volumes of data, Artificial Intelligence can provide insights into customer preferences, allowing small businesses to tailor their products and services to meet the needs of their customers. AI-powered fraud detection and prevention tools can also help small businesses to minimise the risk of fraudulent transactions.
In addition to Artificial Intelligence Mastercard is also leveraging other technologies to create more inclusive financial services and digital payment solutions for small businesses in Nigeria. For example, the payment link solution enables small businesses to accept digital payments from customers, even in areas without access to traditional banking services. Our digital identity solutions also help small businesses to verify the identities of their customers, reducing the risk of fraud and improving the customer experience..
(DBA) What impact do you think increased access to financial services and digital payment solutions will have on the Nigerian economy, and how will it benefit small businesses and entrepreneurs?
(EM) Increased access to financial services and digital payment solutions is projected to have a significant impact on the Nigerian economy, particularly in terms of promoting financial inclusion and economic growth. As a leading global payments company, Mastercard is committed to leveraging technology and innovation to expand access to financial services and promote economic development in Nigeria and across the African continent.
By providing more Nigerians with access to digital payment solutions, Mastercard aims to help small businesses and entrepreneurs grow and thrive. Digital payment solutions, such as mobile wallets and payment cards, offer a more convenient, secure, and efficient way to transact, which can help small businesses save time and money. Additionally, by facilitating access to credit, these solutions can help entrepreneurs and small business owners grow their operations and create jobs, thereby contributing to economic growth.
Another key benefit of increased access to digital payment solutions is that it can help promote financial inclusion. By providing more people with access to basic financial services, such as collaborating with partner financial institutions to provide bank accounts and payment cards, we can help to reduce poverty and improve overall economic well-being. This is especially important for small business owners and entrepreneurs, who often struggle to access financing and other financial services.
In summary, increased access to financial services and digital payment solutions has the potential to unlock economic growth and promote financial inclusion in Nigeria. By leveraging technology and innovation, Mastercard is committed to empowering small businesses and entrepreneurs with the tools they need to succeed in the digital age.
(DBA) Can you share any success stories or case studies of small businesses that have benefited from Mastercard’s solutions in Nigeria, and how these solutions have helped them grow and thrive?
(EM) Mastercard is helping small businesses in Nigeria by providing them with solutions and tools to help them grow and thrive. First, we are raising awareness and driving usage of low-cost digital acceptance solutions – such as Mastercard’s payment link solution.
We are also enabling SMEs to accept digital payment safely and securely, whether through e-commerce and contactless solutions. There is the Mastercard Payment Gateway Services (MPGS), which gives small and medium-sized businesses (SMEs) the ability to accept payments through a web browser and offer consumers a simpler and safer way to transact.
Through Mastercard Start Path, we partnered with MAX, a Nigeria-based motorcycle-share company, to provide digital payment capabilities and instalments for typically unbanked riders, enabling riders to purchase motorcycles over time and, as a result, build their credit profiles.
Accion International and the Center, through its digital transformation project, are building the capacity of financial service providers (FSPs) that bank the most vulnerable individuals and micro and small businesses. Millions of micro merchants will access improved financial products and services, including credit, training, and technical assistance that reflect their needs and enable them to grow and improve their financial health. In Nigeria, Accion Microfinance Bank (AMfB) provides loans and savings products to low-income microentrepreneurs. The Mastercard Impact Fund’s $12M grant and partnership with Accion have the goal of transforming services for 10 million people, including 4 million merchants, globally over four years.
(DBA) Finally, what advice do you have for small businesses, particularly women and youth entrepreneurs, who are looking to improve their access to financial services and digital payment solutions in Nigeria?
At Mastercard, we believe small businesses, especially those owned by women and youth entrepreneurs, are the backbone of the Nigerian economy, and they play a vital role in driving economic growth and job creation in Nigeria. We understand that accessing financial services and digital payment solutions can be challenging for small businesses, but there are steps they can take to improve their access to these essential tools.
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Start with the basics: Having a bank account is the first step towards accessing financial services and digital payment solutions. Small businesses should consider opening a bank account to access the services and products that banks offer, including loans, payment cards, and online banking.
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Build a strong credit history: A strong credit history is crucial for accessing financing and other financial services. Small businesses should strive to build a positive credit history by paying their bills on time, keeping their debt-to-credit ratio low, and avoiding late payments.
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Use digital payment solutions: Digital payment solutions, such as mobile wallets and payment cards, offer a convenient and secure way to transact, helping small businesses save time and money. Small businesses should explore the different digital payment solutions available and choose the ones that best suit their needs.
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Leverage technology: Technology is changing the way we do business, and small businesses should leverage it to improve their operations. For example, using digital accounting software can help small businesses manage their finances more efficiently and accurately, enabling them to make better financial decisions.
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Utilise Business Support Services: Many organisations in Nigeria offer support services to small businesses, including access to training, mentoring, and networking opportunities. Small businesses should seek out these resources like Mastercard’s SME-in-a-Box to improve their skills and knowledge and to make valuable business connections.
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Partner with trusted providers: When selecting financial services and digital payment solutions providers, it is essential to choose a reputable and trusted partner. Small businesses should do their research and select providers with a proven record of delivering reliable and secure solutions.
At Mastercard, we are committed to helping small businesses succeed, with our range of solutions that aid entrepreneurs in growing and thriving in the digital age.
Ebehijie Momoh is the Area Business Head, West Africa at Mastercard. Based in Nigeria, Ebehijie is responsible for advancing the Mastercard brand presence in West Africa, deploying innovative payment solutions and partnering with local governments and market regulators to build a World Beyond Cash.
Ebehijie joined Mastercard from Standard Chartered Bank, where she most recently held the position of Head of Retail Banking in Ghana and prior to that, Head of Retail Banking in Nigeria. In both positions, she was responsible for the development and execution of the Retail Banking business strategy and delivering the results.
Ebehijie started her banking career in Nigeria at Guaranty Trust Bank and subsequently had stints at Diamond Bank and First City Monument Bank, where she held various senior management positions including Assistant Vice President and Zonal Head, Midwest Zone, Vice President and Group Head Conglomerates and Group Head Commercial Banking, Lagos and South Region.
She holds a B.Sc. in Chemistry from the University of Lagos and an MBA from the University of Benin. In addition, she has an MBA from Bangor University, Wales, United Kingdom and is a Chartered Banker in Nigeria and Scotland. She is also an honorary member of the Chartered Institute of Bankers of Nigeria.
