Banking and Mobile Money Adoption: Cultural and Regional Perspectives from Nigeria and Kenya
Banking and Mobile Money Evolution: Cultural and Regional Perspectives from East and West Africa
The banking and mobile money landscape in Africa is unfolding at different paces and with varying adoption patterns across the continent. A recent study comparing financial behaviors among users in Nigeria and Kenya reveals fascinating insights into how these two influential markets are approaching financial services while maintaining their unique regional characteristics.
Why This Research Matters
Understanding the nuanced differences in financial services usage across African markets is critical for several reasons. First, as digital financial services expand across the continent, region-specific insights help ensure solutions align with actual user behaviors and needs. Second, the findings can guide financial education efforts by highlighting service gaps unique to each market. Finally, these insights help bridge the gap between traditional banking infrastructure and emerging digital solutions, potentially accelerating adoption while respecting local preferences.
This research specifically examines Nigeria and Kenya—two markets often viewed as digital finance leaders in Africa, but which demonstrate distinctly different financial ecosystems. By comparing these contrasting landscapes, we gain valuable insights applicable to financial service development in other emerging markets worldwide.
Understanding the Markets
Survey demographics showing Nigeria (66%) and Kenya (34%) respondent distribution, providing dual-market perspectives from West and East Africa.
Our analysis draws from a comprehensive survey of 53 individuals, with 66% from Nigeria and 34% from Kenya. While Nigeria represents the larger sample, both markets provide valuable insights into their respective regions: West Africa and East Africa.
Banking Services Landscape
Traditional banking still dominates in Nigeria (82.9%) while Kenya shows greater diversity with high unbanked population (33.3%) and digital banking adoption.
The contrast in banking adoption between these markets tells a compelling story. Nigeria shows significantly higher traditional banking penetration (82.9%) compared to Kenya (50.0%). Notably, a third of Kenyan respondents (33.3%) report having no bank account, while all Nigerian respondents have some form of banking relationship.
Opay (28.6%) and First Bank (22.9%) lead the Nigerian banking landscape, revealing the growing prominence of fintech solutions alongside traditional institutions.
In Nigeria, fintech-adjacent providers like Opay (28.6%) and PalmPay (11.4%) feature prominently alongside traditional institutions like First Bank (22.9%), reflecting the evolving financial ecosystem.
Kenya’s banking landscape reveals a significant unbanked population (33.3%) alongside established traditional institutions like I&M Bank (16.7%) and newer digital solutions.
Kenya shows a more diverse banking landscape with I&M Bank, KCB, and Equity Bank (each at 16.7%) leading traditional options, while digital-first options like NCBA Loop (11.1%) indicate growing digital banking adoption.
Mobile Money Ecosystem
The stark regional divide in mobile money ecosystems is evident with M-Pesa dominating in Kenya (88.9%) while Opay (62.9%) leads in Nigeria.
The mobile money landscape shows a clear regional divide with zero overlap between preferred services. Kenya demonstrates near-universal adoption of M-Pesa (88.9%), creating a dominant mobile money ecosystem. Nigeria exhibits a more fragmented market with Opay leading (62.9%), followed by PalmPay (31.4%), indicating different competitive dynamics. Each market has developed distinct mobile money ecosystems that operate independently, potentially creating interoperability challenges for cross-border solutions.
Mobile money dominates in Kenya (55.6%) while Nigerian users divide their preferences between MiniPay (25.7%) and traditional banking (11.4%).
Mobile money dominates as the preferred financial service in Kenya, with 55.6% primarily using services like M-Pesa, compared to only 8.6% in Nigeria. MiniPay has gained stronger primary usage in Nigeria (25.7%) than in Kenya (16.7%), potentially due to less entrenched competition. The high non-response rate in Nigeria (54.3%) suggests potential survey methodology issues or difficulty categorizing financial service usage patterns.
Traditional Banking Services Usage
Stark contrast in traditional banking service usage with Nigerian respondents heavily reliant on ATM withdrawals (80%) while Kenyans favor debit cards (44.4%) and wire transfers (38.9%).
Nigerian respondents rely heavily on ATM withdrawals (80.0%) compared to Kenyans (16.7%), suggesting a cash-dependent economy despite digital payment growth. Kenyan respondents show higher usage of debit cards (44.4% vs. 11.4% in Nigeria) and wire transfers (38.9% vs. 5.7% in Nigeria), indicating a more diversified formal banking engagement.
Remarkably similar patterns in bank branch visits across both markets, with over 80% visiting branches only when required, reflecting successful digital transformation.
Both markets show remarkably similar patterns in branch visit frequency, with over 80% visiting branches only when required, suggesting successful digital transformation across both regions. Regular branch users (monthly) exist only in Nigeria (2.9%), while slightly more Kenyans (11.1% vs 8.6% in Nigeria) visit branches a few times yearly.
Cash Handling and Payment Preferences
Kenyans are more likely to avoid cash (27.8%) than Nigerians (11.4%), though both markets maintain hybrid payment ecosystems with around 45% using a mix of cash and mobile money.
Kenyan respondents show a stronger preference for digital payments, with 27.8% avoiding cash when possible compared to just 11.4% in Nigeria. Both markets have similar proportions using a mix of cash and mobile money (around 45-49%), indicating hybrid payment ecosystems.
Kenya shows 100% mobile money usage for account funding, while Nigeria maintains a balanced approach across mobile money, ATM deposits, and salary payments.
All Kenyan respondents (100%) use mobile money to fund their accounts, emphasizing the central role of services like M-Pesa in Kenya’s financial ecosystem. Nigerian respondents show a more diversified approach with similar usage rates across mobile money (65.7%), ATM deposits (68.6%), and salary deposits (71.4%).
Payment Cards and Financial Documents
Bank debit cards dominate Nigeria’s payment landscape at 62.9%, highlighting the continued importance of traditional banking infrastructure.
Mobile money cards account for 72.2% of Kenya’s payment card usage, showcasing the country’s advanced mobile money integration.
Kenya shows dramatically higher adoption of mobile money cards (72.2%) compared to Nigeria (17.1%), reflecting the strong integration of M-Pesa’s ecosystem with card-based payments. Conversely, Nigerian respondents predominantly use traditional bank debit cards (62.9% vs. 16.7% in Kenya), reinforcing the different evolution paths of payment ecosystems.
ATM/bank cards rank as the most important banking documents in both markets, reflecting the continued importance of physical credentials despite digital growth.
ATM/bank cards are the most important banking document for Nigerian respondents (48.6%), aligning with their high reliance on ATM withdrawals. Kenyan respondents show equal importance for ATM/bank cards and all official papers (38.9% each). Account statements hold higher importance in Kenya (22.2%) than Nigeria (14.3%), potentially reflecting greater emphasis on transaction record-keeping.
Transaction Tracking and Financial Concerns
Nigeria relies primarily on SMS notifications (48.6%) while Kenya favors bank statements (50%) for tracking financial transactions.
Kenyan respondents favor bank statements for transaction tracking (50.0%) while Nigerians rely more heavily on SMS notifications (48.6%). The higher use of written records in Kenya (16.7% vs. 8.6% in Nigeria) indicates potential gaps in digital financial literacy or reliable digital record access.
Nigerians are most concerned about transfer fees (60%) while Kenyans worry more about withdrawal fees (50%), reflecting different transaction patterns across markets.
Transfer fees represent the primary concern for Nigerian respondents (60.0%), while Kenyan respondents are most concerned with withdrawal fees (50.0%). This difference aligns with usage patterns, as Nigerians report more frequent transfers while Kenyans may face higher costs when converting mobile money to cash.
Essential Financial Services and Banking Reasons
Mobile money transfers are overwhelmingly considered the most essential financial service in both markets, with even higher necessity in Kenya (88.9%) than Nigeria (74.3%).
Mobile money transfers are considered the most essential financial service by strong majorities in both Kenya (88.9%) and Nigeria (74.3%), underscoring their critical role across both markets. The higher dependency in Kenya aligns with the more established mobile money ecosystem.
Salary requirements drive Nigerian banking relationships (40%), while Kenyans maintain accounts primarily for savings security (27.8%) and business needs (22.2%).
Salary requirements drive banking relationships for 40.0% of Nigerian respondents compared to just 5.6% in Kenya, suggesting different formal employment practices. Banking for business requirements is more common in Nigeria (34.3%) than Kenya (22.2%), indicating different business formalization levels. Kenyans are more likely to maintain bank accounts for loan access (16.7% vs. 2.9% in Nigeria) and slightly more for savings security (27.8% vs. 22.9%).
Loan Preferences
The data reveals markedly different loan preferences with Kenyans strongly favoring mobile money loans (66.7%) while most Nigerians (54.3%) express no clear preference.
Kenyan respondents overwhelmingly prefer mobile money loans (66.7%) compared to Nigerian respondents (20.0%), reflecting Kenya’s more developed mobile credit ecosystem led by services like M-Pesa’s Fuliza. Most Nigerian respondents (54.3%) express no strong preference for loan channels, suggesting potentially less experience with or access to credit options.
Looking Ahead
These findings suggest several key considerations for financial service providers and educators:
- Market-Specific Approaches: One-size-fits-all financial solutions are unlikely to succeed across both markets.
- UI/UX Design: Interface design should account for varying levels of digital financial literacy and preferred access methods.
- Feature Prioritization: Development roadmaps might prioritize different features in each market based on usage patterns.
- Integration Strategy: Solutions should consider the dominant financial channels in each region (traditional banking in Nigeria, mobile money in Kenya).
- Education: Financial literacy efforts should address the specific gaps in each market while building on existing behaviors.
The financial service landscape in Africa continues to evolve, with Kenya and Nigeria showing different but equally valid paths to financial inclusion. Understanding these differences and similarities is crucial for any organization looking to contribute to Africa’s financial future.
Methodology and Data Collection
This analysis draws from survey data collected specifically from respondents in Nigeria and Kenya, with a sample size of 53 individuals (35 from Nigeria, 18 from Kenya). The survey focused on understanding current financial behaviors, preferences, and needs across multiple dimensions of banking and mobile money usage.
The different bank preferences highlight distinct market structures and consumer behaviors across these regions. Nigerian respondents show significantly higher traditional banking penetration, while Kenya demonstrates stronger mobile money integration. These contrasting patterns provide valuable insights for financial service providers seeking to develop solutions tailored to each market’s unique characteristics.
Please note that this particular survey was conducted between February 10th and March 8th, 2025, and it was collected from MiniPay users with active Celo wallet addresses. They were compensated 0.1 cUSD G$ (Celo Dollar token) each, and the address to the smart contract distributing the rewards was/is 0xa8e44606307545a4193b916911054ca3e5c80294.
For more information about our project, please visit our website. This research has also been published in our regional financial inclusion reports.
This forum post was developed based on comprehensive survey data and was reviewed and edited by us.