In December last year, How we made it in Africa published an interview with Tayo Oviosu, founder of the Paga mobile money platform in Nigeria.

Paga allows its users to transfer money to anyone via a mobile phone or other internet connected device. According to the Paga website, its service is currently being used by over 57,000 Nigerians. The company has a grand ambition to serve 40 million users by 2015.

With increasing competition in the industry, signing-up a quarter of Nigeria’s population is set to be a mammoth task. However, the company recently got a financial boost that could go some way in helping it achieve its goals. Earlier this month, Paga received a US$2 million grant from Enhancing Financial Innovation & Access (EFInA), a financial sector development organisation that promotes financial inclusion in Nigeria. EFInA is funded by the UK Government Department for International Development (DFID) and The Bill & Melinda Gates Foundation.

According to Modupe Ladipo, executive director and managing director of EFInA, Nigeria has over 59 million unbanked adults. “By bringing low cost services to every neighbourhood we believe we can help bring a large number of Nigerians out of poverty and improve living standards. We have chosen Paga for this grant because of the robustness of their plans and strength of their team. We are confident that by working together we can achieve our mutual goal of universal access to financial services for Nigerians.”

Oviosu says that building an agent network is one of the biggest challenges facing the company. Agents are responsible for new customer registration, loading cash into customers’ Paga accounts, and processing cash withdrawal requests. “To really get this business right, our goal is to have an agent down the street from every consumer in Nigeria. And that means that we have to put feet on the ground to go and recruit those agents and to manage those agents. It is not just about recruiting them, but it is managing them. And that is actually the tough work of this business,” he told CNBC Africa in an interview last year.

With a population of over 160 million and more than 90 million mobile subscribers, Nigeria certainly offers a massive market for mobile money operators. However, compared to countries such as Kenya, the industry got off to a slow start. The Central Bank of Nigeria (CBN) last year issued operating licences to 11 mobile money operators.

According to CBN  guidelines, telecommunications firms such as MTN, Glo and Airtel are only allowed to provide the network infrastructure for mobile banking, but cannot directly receive any deposits. They must also allow their subscribers to use any mobile payments service of their choice.

The CBN has approved three major mobile payments models:

Bank focused model: Where a licensed deposit-taking bank delivers banking services to existing and prospective customers by using the mobile phone as a delivery channel.

Bank led model: Where a bank, or consortium of banks, partner with other organisations to deliver mobile banking services. In this scheme, the bank should provide all the financial services for the operation. The partner organisations could provide and manage the technology required to deliver mobile payment services to the customer and/or provide the agent network required.

Non-bank led model: This model allows a corporate organisation, excluding banks and telecommunications companies, that has been approved by the CBN to deliver mobile payments services.