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Financial inclusion in Nigeria and brands championing movement

by Goddie Ofose
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According to the Former Director of Banking and Payment System, Central Bank of Nigeria (CBN) Dipo Fatokun, financial inclusion is access to financial services that are available to the adult population in any given economy. Such financial services include payment, insurance, pension, etc. The more the number of adults who have access to financial services, the higher the financial inclusion.

In a report by Enhancing Financial Innovation and Access (EFInA), only 64% of Nigerian adults were financially included by the end of 2020. This means that 36% of Nigerian adults or 38 million adults remain completely financially excluded.

Nigeria’s financial inclusion landscape includes great hope and challenges. As Africa’s largest economy, Nigeria has the potential to drive consumers toward financial inclusion, yet economic instability amongst other factors has made progress uncertain. Six in ten Nigerians (60%) live below the poverty line, with research showing that being poor, rural, and less educated are all barriers to inclusion. Today, banking leads the way to financial inclusion, with nearly three in ten adults (29%) having bank accounts. Three in 100 adults (3%) have mobile money accounts and the same number (3%) have nonbank financial accounts.

After committing to the Maya Declaration, the Nigerian government launched the National Financial Inclusion Strategy in 2012 to reduce the financially excluded to 20% by 2020. Although the goal is ambitious, the strategy reflects its long-term commitment to expanding financial services access and use to underserved populations.

Over the years, the government and monetary authorities have introduced various policies aimed at deepening financial inclusion within the economy. The policies ranged from various institutional involvements such as the establishment of community and microfinance banks to specific policies and programmes designed to facilitate access of the financially excluded to formal financial services.

The challenge of inadequate financial inclusion is not just for the developing economies alone, from the emerging to high-income countries, governments conceive and implement policies that seek to ensure the majority of the population become financially included.

 A major challenge in the financial inclusion process is ensuring that the poor rural dwellers and the underserved communities are carried along, considering the lack of financial sophistication among this segment of the Nigerian society due to the generally low level of financial literacy. The majority of the estimated 40 million financially excluded Nigerians lack knowledge of the services and benefits derivable from accessing financial services.

Y’ello Digital Financial Services (YDFS) a subsidiary of MTN Nigeria, is one of the leading Nigerian entities working to accelerate the CBN’s financial inclusion drive through MoMo Agent services. It was launched in 2019, with the aim to provide safe and accessible money transfer services to financially underserved communities across Nigeria. Following the launch of the MoMo Agent service, YDFS recently announced the expansion of its MoMo products and services, in a bid to deepen financial inclusion in Nigeria.

As part of the expansion, MoMo Agent was upgraded with bill payment, cash deposit, and withdrawal, as well as data and airtime purchase components. Upgrades also included bulk disbursement services, enabling public and private companies to make payments en masse anywhere in Nigeria, without a bank account, ATM availability, or bank branch.

 Furthermore, the cardless cash withdrawal service of MoMo Agent has been expanded to over 40 banks and other financial institutions nationwide, providing seamless financial solutions to more people. Initially exclusive to Access Bank, the service has now been extended to include First Bank of Nigeria, Zenith Bank, GTBank Plc, United Bank of Africa, and other tier-one commercial banks.

 Using the service, customers can visit MoMo Agents nationwide to access funds in their bank accounts without requiring an Automated Teller Machine (ATM) or ATM card. The service utilises a secure getaway that protects customers against fraudulent transactions and requires transaction validation using their bank PIN.

 With the cardless cash withdrawal service, MoMo Agents’ sustained innovation aligns with the Central Bank of Nigeria’s (CBN) financial inclusion target of 95% by 2024.  Customers on the MTN network can dial *223# to locate the nearest MoMo Agent.

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