|
Getting your Trinity Audio player ready...
|
Collaboration between banks, Telcos, and FinTech operators, is the only way to effectively give more Nigerians access to financial services stakeholders have noted.
This will be achievable by the various sectors complementing each other in the value chain, and not as competition or threat, as this will spur financial inclusion and further lead to rapid economic growth for the benefit of all.
Ayodeji Ebo, managing director of Lagos-based financial advisory, Afrinvest Limited said the CBN needs to manage the level of risks in financial inclusion and also licence the Telco’s to come up with more financial products that will widen the gap of financial inclusion, which they don’t currently have.
Bismarck Rewane, managing director of Financial Derivates limited said there are many constraints to financial inclusion and it’s not going to happen overnight.
“It’s not that Nigeria is performing badly, we are not just improving as faster as others,” Rewane added.
Data compiled from the Latest World Bank’s Global Findex Database showed Nigerian adults who are 25 years and above with bank accounts declined by 5 basis points from 49 percent in 2014 to 44 percent in 2017.
This was not different from account holders over 15 years, as their numbers fell 4 percentage points from 44 percent in 2014 to 40 percent in 2017.
The data revealed that 51 percent of Nigerian males had a bank account in 2017 compared to the 27 percent recorded for females; this brings the gap between the male and female to 24 percentage points.
This is however larger than the 20 percentage points gap that was recorded in 2014 when the total number of males with an account was at 54 percent with females at 34 percent.
Rewane added, “There should be level playing fields between the Telco’s and banking system that will enable the customers have options of either using the telephone wallet or cash wallet rather than choosing for them.”
“It’s not about who is doing better or doing worse, it’s about making the customer the king and judge of its decision; however I think the Telco’s should be given more freedom,” Rewane said.
Tobi Osanyingbemi, deputy manager at Tier one lender Guaranty Bank said financial inclusion will automatic fall in place when the economic atmosphere is balanced.
“If we take a look at majority of the countries performing better than Nigeria in financial inclusion, we would discover that they all have better structured economies,” Osanyingbemi told BusinessDay.
According to the World Bank report, mobile money drove financial inclusion in Sub-Saharan Africa, as only eight countries in Africa which included Burkina Faso, Côte d’Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe recorded 20 percent or more adult using only a mobile money account.
Although the World Bank also noted there are immense opportunities in the region as about 95 million unbanked adults receive cash payments for agricultural products, and roughly 65 million save using semiformal methods.
“The banks are always looking at the best opportunities to make money; the reason the banks are not doing so much now is the fear of losing customers savings,” Osanyingbemi said.
Also, young adults within the age of 15 and 24 with an account in 2011 stood at 21 percent while 2014 and 2017 recorded 36 percent and 33 percent respectively, according to the World Bank data.
Furthermore the report revealed that just 12 percent of Nigerians who are 15 and above received wages through mobile phone, while just 11 percent received wages into their account.
In 2017,as high 70 percent of those who are 15 and above still paid utilities using cash only although slightly lesser than the 80 percent recorded in 2014.
Nigeria with a 41.6 percent financial exclusion rate is faced with various challenges to achieving the set 80 percent financial inclusion target by the Central Bank of Nigeria (CBN) by 2020.
Umar Danbatta, executive vice chairman of the Nigeria communications commission (NCC) told BusinessDay last week that the NCC has engaged with the CBN towards making Telco’s drive the Mobile money model in Nigeria.
“The CBN Governor had a few reservations on fraud associated with the Telco led mobile money model like you have in Kenya,” Danbatta said.
According to a survey by Enhancing Financial Innovation and Access (EFInA), about 40.1 million Nigerian adults are financially excluded and 48.6 percent are financially included while 58.4 percent are said to be financially served.
The financial inclusion rate in Africa’s largest economy however remains low compared to its peers of emerging economy countries; Kenya at 81 percent and Tanzania at 54 percent.
This is a result of the mobile money model which these various countries have welcomed as one of the means of carrying out financial transactions.
“We need to make networks more secure; the Telco’s will be invited to showcase how secure their services are to conduct financial transactions. We need to think about that before we bring it into play,” Danbatta said.
The mobile money initiative is a financial services platform that allows its users a mobile wallet using their telephone number, and when they top up the line with credit, they can then be able to transfer it to someone for payment.
This could be a friend, utility company, or shop that they walk into.
They can also go to an outlet and withdraw their credit as cash, as compiled from mobile money users in Kenya, Ghana and Tanzania.
Africa’s mobile money success story, M-Pesa in Kenya, is frequently cited and referenced when Digital Financial Services (DFS) comes to mind.
Vodafone’s Kenya associate, Safaricom, operates M-Pesa that was developed with the support of a grant from the Department for International Development (DFID).
In 2007, M-Pesa commenced operations with a letter of no objection issued by the Central Bank of Kenya (CBK) after addressing due diligence issues relating to its legal status and other factors.
In 2016, about 6 billion transactions were conducted using M-Pesa, a monthly average of 614 million transactions.
The service has 18 million Kenyan subscribers (more than two-thirds of the adult population).
Part of M-Pesa’s success can be traced to the relatively relaxed regulatory environment as the Central Bank of Kenya (CBK) permits the participation of banks and non-banks (including mobile network operators) in the provision of DFS.
As at 2016, financial inclusion in Bangladesh stood at 34 percent with 13 percent of the adult population holding a mobile money account.
To say that mobile money in Bangladesh grew fast is an understatement.
In 2014, Bangladesh added 12 million new registered accounts, making it one of the fastest growing markets by total accounts in the world.
Bangladesh is also home to bKash, the second largest mobile money provider in the world.
The Nigeria government, in its Economic Recovery & Growth Plan (ERGP) signed in April, 2017 recognizes the need to deepen the financial services sector as one of its key strategies to drive inclusive growth.
Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs which includes; transactions, payments, savings, credit and insurance which will be delivered in a responsible and sustainable way, also access to a transaction account is cited as a first step toward broader financial inclusion since it allows people to store money, send and receive.
ENDURANCE OKAFOR & DIPO OLADEHINDE
