Adeola Odeku Street in an upmarket Lagos neighborhood boasts the highest concentration of bank branches in Nigeria — but when people need cash they turn to mobile money agents under patchy umbrellas clutching palm-sized point-of-sale devices, rather than the lenders. There are more than two million mobile agents operating across Nigeria — one for every 100 people — handling most of the country’s daily transactions and starving the formal banking system of cash. The Central Bank of Nigeria, looking to increase financial inclusion, encouraged their proliferation. But regulators now fear they are consuming the monetary system, undermining the fight against inflation and pushing the naira further from their control. There are now roughly 1,600 of them within every square kilometer, according to the IMF. The surge has been driven by an army of young people seeking jobs and the rise of financial technology companies like Opay, Paga and Moniepoint, that provide affordable terminals. Now the central bank is trying to crack down on agents ahead of the holiday season, when demand soars and they raise their fees.
