Features
Driving Financial Inclusion for Inclusive Economic Growth
By Tolu Oyekan, Partner, BCG
Financial inclusion is increasingly becoming an area of priority across the globe among policymakers, researchers and development-oriented agencies. Its importance comes from the promise it holds as a tool for economic development, particularly in the areas of poverty reduction, employment generation, wealth creation and improved welfare and general standards of living.
The Nigerian government launched the National Financial Inclusion Strategy in 2012 (NFIS 2012), to achieve 80% inclusion by 2020. The NFIS framework was leveraged by the Central Bank of Nigeria (CBN) to effectively regulate the Nigerian financial sector. This drive necessitated the introduction of the cashless policy, the proliferation of agency banking, the growth of microfinance banks and increased adoption of fintech solutions; especially digital payment products.
However, these positive outcomes could not help achieve the target of 80% inclusion by the end of 2020. Barriers that hampered this target were irregular income, illiteracy, lack of proximity to access points, lack of required documentation, inadequate awareness, high service fees, and the high affinity for cash.
The Impact of COVID-19
In addition to the bedeviling barriers, came the COVID-19 pandemic. In its wake were the falling prices of crude, the halt in economic activities and the loss of income by many Nigerian households. The unemployment rate rose to 27.1%, inflation increased and the purchasing power of the people dropped.
Interestingly, despite these negative impacts on the economy, there was growth within the entrepreneurial sector. According to the EFInA Access to Financial Services in Nigeria 2020 Survey, about 86 million Nigerian adults’ livelihoods were negatively impacted by the pandemic. However, the survey showed that about 49.1 million Nigerians turned the situation around to start their businesses either in agriculture or service delivery. These new businesses employed about 33.2 million Nigerians, thereby creating about 70.3 million jobs.
The Revised NFIS While the NFIS 2012 may not have delivered the 80% inclusion target, it has however provided grounds to evaluate progress and identify the barriers and insights in developing a refreshed document for the new target. Upon review of the NFIS 2012, the CBN and its stakeholders came up with the Revised NFIS document which targets a 95% financial inclusion threshold in Nigeria by 2024.
This is ambitious given that the financial inclusion index moved from 57.3% in 2010 to 60.3% in 2012 and 63.2% in 2020, a growth of about 5.9% in 10 years. Achieving a 31.8% increment in 4 years is indeed ambitious, but not impossible.
The Revised NFIS identified five priority areas as key to achieving the new target, namely; an enabling environment for the expansion of Digital Financial Services (DFS), rapid growth of agent networks for last mile delivery, harmonization of KYC requirements, conducive environment to serve the excluded; and incentivizing the adoption of cashless payment channels.
The Revised NFIS also examines other salient issues such as increasing awareness and knowledge of financial products, channels as well as trust. There is also the need for frequent review of the implementation of the strategy so as to take lessons faster and adjust the strategy to fit prevailing realities.
After All, Said and Done
Though the pandemic might have spelt doom for a lot of businesses and economies, it has however thrown up a few positive indicators for the financial inclusion drive in Nigeria. As earlier mentioned, while people lost their jobs, there was an upsurge of micro businesses which created employment opportunities, thus reducing the impact of unemployment in the country.
The pandemic also led to the increased adoption of DFS and financial agent services. According to the Nigeria Inter-Bank Settlement Service (NIBSS) report, the monthly use of digital channels rose from 45 million transactions valued at N5.4 trillion at the end of 2017 to over 287 million valued at N23trillion in June 2021. This represents a growth of over 530% in the last 5 years. Thus, the volume of digital transactions rose from 75% in 2019 to 135% in 2020. Another report by ACI shows that digital payment transactions grew to over 1 billion, representing a growth rate of over 45%.
There has been an increased uptake of banking products and services, the banking sector being the biggest driver of the financial inclusion agenda in Nigeria. Between 2018 and 2020, the banked population grew by 5%, savings accounts by 6% and banking agents by 16%. There has also been an increased adoption of non-banking products and services such as financial services agents, pension, insurance and mobile money.
To ensure that the targeted 95% inclusion is achieved by 2024 amidst the drawbacks thrown up by the pandemic and other peculiarities of the Nigerian economy, the CBN and its stakeholders have their work cut out for them. The following are some of the areas they should focus on:
Increasing access to financial services
This should be viewed from two different lenses; the consumers’ and the service providers’. From the view of the consumer, it is important that the tiered-Know Your Customer (KYC) documents be harmonized to reduce the limitation to having a transactional account. A transaction account is the bedrock of financial services.
Increased awareness for DFS and other banking products will improve access to these products and services. Banking and DFS transactional fees should be reviewed to encourage massive uptake especially among rural dwellers and the poor.
From the service providers’ perspective, the bottlenecks associated with acquiring the Payment Service Bank (PSB) license should be reduced. The process should be democratized to allow private investors other than telcos, fintech companies and banks.
The CBN should facilitate the actualization of the Shared Agents Network Facility (SANEF) to enable the proposed 500,000 agents provide financial services in the under-served areas, especially the Northern region.
Improved Economy
More importantly, improving the economic and financial status of Nigerian households and firms will enhance the possibilities of a financially included Nigeria. With a thriving economy, the households will save and embrace other financial products services as credit, insurance and pensions.
The prevailing security challenges across the country should be addressed as it hampers economic activities and consequently the financial inclusion figures.
Capturing the over 40 million MSMEs in the formal financial sector is critical to improving the economy. This group employs over 80% of the country’s population and contributes about 50% of the country’s GDP. When formally served, progress is easier to monitor and track.
With more women being financially excluded- 41% female and 33% male- it suffices to say that concerted efforts should be channeled towards ensuring that more women are empowered to carry out more economic activities and consequent financial transactions. Efforts should be made in advancing the National Financial Inclusion Special Intervention Working Group’s (a subcommittee that looks into gender-related financial inclusion issues) recommendations. Financial products such as low interest loans, grants and employment opportunities should be extended to women.
Collaborations
The CBN needs to collaborate with critical enablers such as the Nigeria Communications Commission (NCC). Initiatives such as the Infrastructure Companies (InfraCos) project- an initiative expected to provide broadband fiber and connectivity to every Local Government Area of the federation with a minimum speed of 10 Gbps- should be implemented to ensure delivery of services by agent banks, even in rural areas.
The Nigerian postal service’s network also provides a wide reach that the CBN can leverage to achieve last-mile delivery.
Incidentally, legislative provisions for the financial inclusion strategy could be strengthened. Collaborating with policymakers to effectively implement and track the financial inclusion strategy, makes the 95% inclusion target less daunting.
A BCG report commissioned by Telenor, a multinational telecommunications company, stipulated that a 1% increase in financial inclusion increases the real Gross Domestic Product (GDP) per capita by 3.6 per cent. This, therefore, underscores the socio-economic impact of financial inclusion as a critical driver to foster economic development, reduce poverty and achieve inclusive economic growth.
Community
Abiodun declares state of emergency on flooded Isheri community
…assures residents of permanent solution after comprehensive assessment
Ogun State Governor, Prince Dapo Abiodun, on Monday declared state of emergency on the flooded Isheri community, in Ifo Local Government Area of the State, as he assured residents of the area quick intervention to save the situation.
The governor added that a comprehensive assessment that would lead to permanent solution to the menace of flooding in the affected area would be conducted very soon.
Prince Abiodun, who stated this while fielding questions from newsmen after inspecting the flooded community, said that his administration is working with the federal government to deal with the situation as an emergency case.
He noted that the time has come to find a lasting solution to the perennial flooding to make the area morw conducive for living.
According to him, the state government will see to the elevation of some roads in the area as parts of the solutions to the problem.
The govenor said: “We will prioritize the works here because I am touched with what I have seen. I will ensure that we immediately begin to see signs of relief as we are stepping this up. The Minister of State for Environment is already aware. The Vice President is already aware and also the president. It will be dealt with as an emergency and we are taking it as such.
“As an emergency, I will like to take it up myself. Please continue to bear with us as we are going to conduct a comprehensive assessment of what we need to do to make this place conducive for living.
“Whatever that assessment comes up with is what we are going to implement. So, we are going to first start with ensuring that we have the required road infrastructure at the appropriate levels.
“So if you now built in such a way that we need to relocate you, we have to do that. Whatever it is that we must do to ensure that place does not persistently experience flood, we will do it. But let us wait for the result of the studies to come back and then we will begin to take that decision as and when the situation arises.”
Addressing residents of Riverview Estate, Governor Abiodun said he has requested for an area survey of the entire estate to identify critical areas that needed immediately intervention.
He assured that the intervention would come through the construction of an elevated road with adequate drainages to mitigate their suffering.
“I want to assure you today, knowing fully well that we are a promise keeping administration, we do not say what we do not mean, my heart goes out to you, it is very unfortunate, I am giving my commitment today, the commissioner for works will come and see what needs to be done.
“We have also engage the Minister of State for the Environment, who fortunately, is from Ogun State and I have already brought this to his attention.
“Before the end of the week, I will also table it before the Vice President and the President as well so that we ensure that this problem gets all the desired attention and consequently gets the desired solution so we can bring this to an end,” he said.
The governor also disclosed that he and the Minister of Water Resources would visit the community in few days time.
“We will also discuss the issue of the Ogun-Osun River Basin Authority and try and interrogate the activities there and understand how their activities affect this community and other communities with respect to the opening and closing of the dam,” he said.
The governor described the environment around the Kara cattle market as an eyesore and not befitting the dreams of a “new Ogun State”.
He said that the market was not conducive for human living and not in tandem with the Sustainable Development Goals and waste disposal.
He, however, acknowledged the area as one of the biggest commercial operation that provide services to a large number of people, even as he assured that government would go into a satisfactory agreement with the market men and women after which a comprehensive beautification of the area would take place.
The Chairman, Riverview Estate, Abayomi Akande, in his remarks, intimated the governor of the suffering residents of the area are going through as a result of the flooding.
He said that there is a need for a panel of inquiry into the operations of Oyan Dam to stop incessant release of water to cause havoc in the State
He applauded the governor for sending miscreants packing from the road, saying residents of the axis have suffered robbery attacks and other criminalities for quite awhile.
Akande urged the state government to think of converting the area into a Government Residential Area (GRA) through Public Private Partnership arrangement to fast track its development.
Features
MediaTek, Airtel Nigeria intensify collaborative efforts to bolster mobile connectivity in Nigeria
Lagos, Nigeria – October 12, 2023 – MediaTek, a global leader in semiconductor industry together with Airtel Nigeria, a leading telecommunications service provider, briefed the local media on Thursday on their collaborative efforts, to drive technological advancements and improve mobile connectivity across the nation.
The collaboration introduces MediaTek’s T750-powered Customer Premises Equipment (CPE), a groundbreaking technology that enhances internet connectivity. This advancement allows users to access high-speed 5G networks from the comfort of their homes, opening doors to remote work, gaming, online education, and entertainment streaming like never before.
Speaking during the session, Rami Osman, Director for Corporate Sales and Marketing at MediaTek, Middle East Africa, highlighted MediaTek’s commitment towards expanding its footprint across the Smartphone and Smart Device ecosystem in the Middle East & Africa (MEA) region.
“MediaTek is at the forefront of the global semiconductor industry, and we are proud to lead the way in key sectors like Smartphones, 5G Fixed Wireless Access, Wi-Fi, TV, and AI-IoT. In Nigeria, our collaboration with Airtel Nigeria, revolves around three core areas of focus. In connectivity, we are enhancing high-speed internet access with our advanced chipsets.”
“In the Smartphone domain, we are committed to offering a wider range of premium and flagship devices while supporting the transition from feature phones to smartphones. In the realm of AI-IoT, we are exploring new possibilities and technologies. Thus, this will promote digital inclusion, revolutionize connectivity in Nigeria, and contribute to sustainable development goals,” said Osman.
In addition, he said, “This collaboration aligns seamlessly with our MEA agenda, laying a robust foundation for the future of 5G technology. As we move forward, we are excited to lead in technological progress within this continually evolving region.”
Ismail Olusegun Adeshina, Director, Marketing at Airtel Nigeria, emphasized the importance of the partnership with MediaTek and how it will provide affordable connectivity to Nigerians. He stated, “Our commitment to innovation is evident through our early adoption of 5G technology. We’re proactively investing in this technology to improve connectivity, to tackle coverage and cost challenges, and make 5G devices more accessible across Nigeria”.
MediaTek powers globally recognized brands and remains dedicated to providing state-of-the-art innovations through its latest products and solutions. These offerings span a diverse range, including smartphones, smart devices, automotive technology, satellite connectivity solutions, and next-generation wearables.
MediaTek’s product portfolio includes MediaTek Dimensity for 5G smartphones, MediaTek HelioG series for 4G gaming smartphones, MediaTek Kompanio for arm-based Chromebooks, MediaTek Pentonic for Smart TV technologies, MediaTek Genio for Internet of Things applications, MediaTek Filogic for advanced Wi-Fi 6/6E & Wi-Fi 7 solutions, and MediaTek Dimensity Auto for cutting-edge automotive technologies, among others.
For more information, please visit: https://www.mediatek.com/
The award-winning Bigi Carbonated Soft Drink brand, a product of Rite Foods Limited, is delighted to unveil her highly-anticipated fourth edition of its “Bigi Watch and Win” promo. Designed exclusively for movie enthusiasts in Lagos and Abuja, this exciting promo offers participants the opportunity to watch their favourite movies and win fantastic prizes.
From September 18, 2023, to November 18, 2023, movie goers can enjoy any film of their choice at Silverbird Cinemas and receive a raffle ticket. These tickets can be redeemed for a chance to win incredible prizes, including laptops, Bigi products, printers, perfumes, and more. The grand prize for this edition is a brand-new car.
The first edition of “Bigi Watch and Win” took place in 2021, and later that same year in December, the Bigi brand held another edition. Since then, it has become an annual tradition, demonstrating Rite Foods Limited’s commitment to rewarding brand loyalty among its valued consumers.
Ms. Biola Aransiola, Assistant Brand Manager for Bigi, expressed her excitement about the fourth edition of the promo, saying, “We’ve partnered with Silverbird Cinemas to enhance people’s movie-going experience. Movie lovers can enjoy any of our 13 Bigi Carbonated Soft Drink flavours while watching their favourite films and stand a chance to win amazing prizes.”
Ms. Aransiola also mentioned that her favourite part is witnessing participants’ reactions when they discover the incredible prizes they have won, particularly the grand prize—a brand-new car. She encourages potential participants to check @getbigi on all social media platforms for the terms and conditions.
Through the “Watch & Win” promo, the Bigi brand accentuates Rite Foods Limited’s dedication to supporting the entertainment industry. The brand continues to sponsor movie premieres, as it has in the past with movies such as “The Prophetess,” “Progressive Tailors Club,” and “Aki and Pawpaw.” Additionally, it has been a consistent sponsor of the popular talent discovery platform, Nigerian Idol, for three consecutive seasons (6, 7, & 8), helping aspiring Nigerian singers achieve their dreams of stardom in the music industry.
The “Watch & Win” promo, combined with other effective marketing initiatives, has earned the Bigi brand numerous awards within its market segment. In 2023, Bigi Cola was honored with the “Best Value for Money” award at the BrandXchange Consumers Value Awards. In 2022, it received the “Fastest Growing Cola Brand of the Year” award at the Marketing Edge Brands and Advertising Excellence Awards in Lagos. The Bigi brand also claimed the “Most Outstanding CSD Brand of the Year” award at the 2021 Brandcom Awards, solidifying its position as a market leader in the beverage industry, outperforming its competitors.
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