A research body, Enhancing Financial Innovation and Access (EFInA), has said the persistent high cost of mobile data amongst of other things is suffocating small businesses in Nigeria.
In its report titled ‘Leveraging Technology for MSME Financing in Nigeria,’ it stated that many low income Nigerians still found current costs of data very expensive.
EFInA said the high cost of data was preventing many MSMEs in Nigeria from accessing the internet to promote their businesses and it thus constitutes one of the major obstacles inhibiting the growth of small businesses in Nigeria.
The report, which identified various challenges facing MSMEs in the country, also noted that the Nigerian economy had about 39.7 million MSMEs that has been unable able to deliver on its potential due to several critical challenges.
While noting that smartphone penetration in Nigeria was increasing, helped significantly by more affordable pre-owned phones, EFInA in the report said: “Data, however, needs to be more affordable to get more of our MSMEs to consistently use their phones for digital and micropayments.
“Because of expensive data, quite a significant number of lower middle- and lower-income demographics in Nigeria would switch off their WhatsApp connection and only turn it on periodically.
“This suggests that data costs are expensive relative to the income of lower-income demographics in Nigeria and would constrain the consistent use of digital payments even as smartphones get more affordable.”
EFInA also highlighted the current Unstructured Supplementary Service Data (USSD) pricing per session of N6.98 as a bottleneck to MSMEs leveraging mobile payment.
Stressing further on the USSD pricing, the organisation, said “It would constitute a disincentive for the usage of the USSD platform that should be ordinarily offering inclusive payments given that the USSD phone is the most accessible and affordable for millions of MSMEs and their customers,” it added.
