Chinenye Anuforo
The economic welfare and growth of a nation depends upon the accessibility of people to financial product and services. Efficiently mobilizing their household savings and allocating them effectively to the growing credit requirement of the economy helps in sustainable development of the country.
Government and the banking sector are making tremendous efforts to bring every section of the country into the mainstream financial system. Still there exists a significant gap between the growth expectations and the ground realities in context of ‘mobilisation and utilization of funds’ that support inclusive growth of the country. There is also a significant disparity among the people of rural and urban area in availing the services of the financial system. There is a need of effective tools to bridge the gap and bring in every section of people from all parts whether rural or urban to take part in the mainstream financial activities. Modern information and communication technology (ICT) can act as a tool to develop a platform which helps us to extend the financial services in remote areas. Technology intervention helps banks to reduce their cost, to increase customer reachability and in better management of business risk.
Financial inclusion means that appropriate financial services and products including savings, payments, credit, and insurance are readily available to adults of all income groups, at a cost affordable to the customer and sustainable for the provider, and provided in a responsible manner. The benefits of financial inclusion are wide-ranging: it helps people better manage their lives, smooth their cash flows, overcome income shocks, and invest in their skills, health, or new businesses.
Experts that gathered at the Social Media Week Forum last week in Lagos, highlighted the importance of technology in achieving Nigeria’s financial inclusion plan, which, targets a 20 per cent reduction of financially excluded adult Nigerians in this year.
Some of the experts argued that year after year, millions of dollars in investments have been pumped into financial inclusion around the world but the issues faced are mostly in emerging markets like Nigeria where there is high population but these people are excluded from financial services that could improve lives and businesses.
They said, “The role technology plays in driving financial inclusion is major and Fintechs are leveraging technology that makes it easy for citizens regardless of age, class and location to access financial and banking services. Challenges are inevitable but technology is already helping to solve this problem in the following ways:
A collaboration between fintechs and the traditional banks as well as other stakeholders like telecommunication companies will further accelerate innovation and access to Financial services – the new Payment Service Banks are classic examples of how this collaboration may potentially work;
technology deployment powered by funding from large corporates and social enterprises driving Financial Inclusion will provide more options for users;
gap analysis and requirements gathering will lead to adequate products that truly reduce the gap and accelerate inclusion; and
programmes that enable agents as last-mile Financial Service providers are key, and when we couple this with new technologies like AI, machine learning and big data analytics, the possibilities become limitless.
The overall conclusion was that there is no financial inclusion without financial literacy. So, the first step to achieving financial inclusion in a country like Nigeria is getting more people on board, creating awareness and providing more information on the issue. After all, for an economy to prosper, everybody needs to be financially included.
The CEO, Future Software Resources, Mrs. Nkemdilim Uwaje Begho, one of the panelists, explained the role of FinTechs in offering new technology solutions that would drive banking operations in achieving the 20 per cent reduction target of financially excluded adult Nigerians. She called for more collaboration between FinTechs and the banks in accelerating technology innovations that would further drive financial inclusion in Nigeria.
Wole Faroun, the host of TechRoundUp said that in a digital revolution fueled by Social Media, there is a need to fully understand the way the financial inclusion is connected with our interactions on social media, as well as cybersecurity.
Executive Director, Personal and Business Banking, Stanbic IBTC Bank, Mr. Wole Adeniyi, one of the panelists, said the role of technology in financial inclusion drive, was meant to democratise access to financial services, and that Stanbic IBTC Bank, would continue to help in democratising that access, through the offering of demystified banking solutions that would help customers carryout banking transactions with ease within couple of minutes, thereby reducing the time spent in most banking operations.
According to Adeniyi, “The massive investments in banking solutions by FinTech and the banks, are actually driving financial inclusion in a more faster and more convenient ways. Our role as banks is to bring more Nigerians on board and offer them opportunities to be financially included, and we have solutions that give customers access to broader financial services at affordable rates. Our EasyCash for instance, enables customers to experience faster time in accessing loans and other financial services, especially with micro lending services.” He further explained that Stanbic IBTC also support small agro businesses through its Mobile Wallet and the Founders Factory channels, where the bank offers easy access to loans to small businesses in the agricultural sector.
Another panelist, and Head of Information at EFInA, Dayo Odulate Ademola, while citing the 2018 data on financial inclusion that was released by EFInA, said although, the number of adult Nigerians that were financially included was on the rise, the growth rate is not proportional to the growth of the country’s population, as about 36.6 per cent of adult Nigerians are still financially excluded. She said the fastest way to match financial inclusion growth with population growth, was to apply technology solutions, which according to her, have helped Nigeria to leapfrog her infrastructure challenges as a nation.
“Technology has enabled us to have access to financial services in recent times, using technology as a bedrock,” Ademola said, adding that between 2016 and 2018, about 9.4 million Nigerians relied solely on informal financial services, but that technology has helped in reducing such gap.
On government regulation of financial services, Ademola said there was need to put regulations in place for the protection of consumers but such regulations must not stifle technology growth. She called for harmonization of different data that are sitting in silos at different ministries of government, to enable Nigeria boost her financial inclusion drive with the right identity of adult Nigerians.
CEO, 3Line Card Management Limited, Mr. Femi Omogbenigun, who also spoke as a panelists, said: “Technology has helped us to design products for the financially excluded adult Nigerians, and several people are using our products to access banking services in a more convenient way, without going to the baking hall. There is need for increased partnership between banks and agent networks.”
Omogbenigun said poor telecommunications network, most times, pose challenges