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EFInA Survey Shows 58.4% Nigerian Adults Now Financially Served

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(L-r): Senator Rafiu Ibrahim, chairman Senate Committee on Banking & Financial Institutions; Ms. Modupe Ladipo, chair, EFInA’s Board; Dr. Obiageli ‘Oby’ Ezekwesili, Senior Economic Advisor, Open Society Foundations (OSF); Her Majesty Queen Maxima, United Nations Secretary-General’s Special Advocate for Financial Inclusion for Development, of the Netherlands and Lamido Sanusi Lamido, Emir of Kano, at the EFInA Financial Inclusion Workshop in Abuja.

By peter oluka

In a bid to reduce poverty and achieve inclusive economic growth in Nigeria, Enhancing Financial Innovation & Access (EFInA), a financial sector development organization hosted a workshop with stakeholders such as the Federal Government, United Nations (UN), Heads of Federal Financial Inclusion Initiatives, Academics, Financial Institutions and Financial Services Regulators in Nigeria to advocate for the implementation of policies to drive financial inclusion in Nigeria.

The theme of the workshop was ‘’The Role of Government in Driving Financial Inclusion in Nigeria’’.

Ms. Modupe Ladipo, the chair of EFInA’s Board, shared key barriers responsible for increasing the financially excluded population in Nigeria.

She indicated that “generally, income levels in Nigeria are very low. 19.6% of Nigerians mainly get their source of income from non-farming business while 19.1% get theirs from family business (subsistence or commercial farming).

Only 4.2% of the adult population get their source of income from the formal sector. In addition, she commented that EFInA observed that the North has a high level of financial exclusion. This is as a result of massive job losses, limited resources and no basic necessities of opening a bank account.

Out of 96.4 million adults in Nigeria, 56.3 million (58.4% of the adult population) are now financially served.

40.1 million Nigerian adults (41.6% of the adult population) are financially excluded (without any form of access to financial services). The National Financial Inclusion Strategy target is to lower this figure to 20.0% of the adult population by 2020’’.

She highlighted the issue of inaccurate data in assessing economic growth in Nigeria. ‘‘There are lots of issues in terms of validation and credibility. According to National Identity Management Commission (NIMC), only 6% of Nigerians are duly registered as at 2016. Only 24% of the population has a Bank Verification Number (BVN). We really need to devise how to get a unique form of identification so that we can start to address some of these issues.

She emphasized that the number of microfinance adult users declined from 2.6 million in 2014 to 1.8 million in 2016.

There is a general problem around trust as the licenses of some microfinance banks have been revoked. With a lot of bank charges, account owners are left with little money in their bank account.

Similarly, the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development, Her Majesty, Queen Maxima of Netherlands, gave a keynote address on the ‘Transformative Power of Financial Inclusion’.

She stated that adopting inclusive strategy is a powerful tool to expanding opportunities for all Nigerians.

She highlighted the current progress made in the National Financial Inclusion Strategy, and emphasised to stakeholders the need for high-level political leadership and the participation of the private sector in achieving the targets. Queen Maxima went on to stress that allowing mobile operators to provide mobile money accounts can be a game changer for financial inclusion in Nigeria, and that stakeholders prioritise the development of inclusive retail e-payments system that serves as a basis to distribute other financial services such as savings, payment, credit and insurance services.

She stated that the process of revising Nigeria’s financial strategy indicates huge opportunities to leverage technology. ‘‘Utilizing technology and expanding mobile money is one of the most promising tools to addressing this gap.  It allows user to access their accounts remotely through their mobile devices.

Currently Nigeria has 58.2 million unique mobile phone users, the contrast to 27 million using mobile banking.

This underscores the immense potential which mobile banking shows for advancing financial inclusion.

The Chairman Senate Committee on Banking and Financial Institutions, Senator Rafiu Ibrahim, shared insights on “The Role of Government in Ensuring Financial Institutions Address the Needs of Masses”.

Senator Ibrahim highlighted Federal Government initiatives aimed at promoting economic stability and deepening financial inclusion in Nigeria. He stated that the Government would support mobile banking efforts, and lay the framework to permit mobile network operators to deepen its penetration.

The Governor of Central Bank, Mr. Godwin Emiefiele (CON), in his address delivered by Director, Development Financing, CBN, Mr. Mudashiru Olaitan, explained that initiatives like the Bank Verification Number scheme and others have addressed issues connected to identification in the banking system. ‘‘As we progress in our financial inclusion effort, the need to develop the competences of relevant institutions must be pursued.

Some of the issues we need to address include low infrastructure in rural areas, low income, low saving culture, high unemployment and cultural & religious barriers.

Government has a critical role to play in order to promote inclusive financial execution. Government needs to provide an enabling environment to support the entire value chain within the financial sector to achieve its objectives.

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E-Financial

Nigerian Farmers Log on for Cash in Hi-Tech Networks

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It looked like the end had arrived for Adewale Fatai’s chicken farm. Money was running out.

 

Built to house 30,000 chickens, the farm was producing fewer than 2,000 chicks. His family had no funds to lend, and Nigeria’s banks weren’t interested.

 

Instead, he went online.

 

Two years later, Fatai now has 20,000 chickens. Flanked by thousands of chirping birds at his farm in Nigeria’s southwestern Ogun state, Fatai told Reuters that his operation was saved by Farmcrowdy, one of a breed of new peer-to-peer lending companies aiming to match farmers with small investors.

 

Farmcrowdy uses videos and photographs to show off farms to prospective investors, willing to tie up a bit of cash until harvest time and collect a small return.

 

Onyeka Akumah, co-founder and CEO, Farmcrowdy said the company has so far helped 7,000 small-scale farmers receive a total of $6 million from 2,000 investors since it launched two years ago. He said 95 percent of investment comes from within Nigeria.

 

The typical investment starts from around 90,000 naira – $300 – too little to interest many banks but enough to help keep a small farm going until harvest.

Onyeka Akumah, co-founder and CEO, Farmcrowdy

Since taking office in 2015, President Muhammadu Buhari has said he aims to revitalize the agriculture sector in Africa’s most populous nation to reduce the OPEC member’s reliance on oil exports and cut down on costly food imports.

 

But local farmers face multiple challenges – from floods, to a lack of electricity to regulate irrigation, to fighting with semi-nomadic cattle herdsmen that has claimed hundreds of lives this year. Most of the tens of millions of farmers work on a subsistence basis and live on less than $2 a day.

 

Farmers complain that they lack the access to affordable loans needed to cover their costs until harvest time.

 

Farmcrowdy and another firm, Thrive Agric, allow investors to choose a farm on the internet and decide how much to invest. They advertise returns of around 12-20 percent for investments in soybeans, maize, tomatoes, poultry and cattle. Investors buy a funding stake and are kept updated on the progress of crops.

 

“One of the primary problems we were trying to solve was solving the problem of access to funds for farmers: giving them the right expertise for them to grow and also linking them to markets,” said Uka Eje, CEO of Thrive Agric, at his office in Abuja.

 

He said some $2.7 million had been raised by 1,670 investors for nearly 10,000 farmers since the company’s launched in 2017. His company provides farmer clients with expertise as well as fundraising, he said.

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Cyber Thieves Raid Banks, Inflict Losses

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Nigerian financial system has been jolted by a lethal development; and that is the growing activities of cyber criminals who work in and outside the system.

 

Website cloing, Identity fraud and Automated Teller Machine (ATM) scams, are now so rampant that the Central Bank of Nigeria (CBN), banks, switching companies, the police and users are having sleepless nights.

 

In 2017, Nigeria was estimated to have lost about $450 million to cybercrimes.

 

The most common today is the fake bank alerts scam which is growing in scope and leaving in its losses in its wake.

 

In this scam, fraudsters pose as potential buyers of goods or services provided by the bank customer and after both parties have agreed on a price, send fake SMS’s indicating they have deposited money into the sellers’ account.

 

The criminals usually count on their target, believing the SMS is real and would not bother to confirm with his/her bank before releasing the goods.

 

There is also website cloning scam where websites of genuine financial institutions are cloned are the scammers using what is known as phishing, the criminals send fraudulent SMSes and emails to victims directing them fake Web sites where they are asked to input sensitive data.

 

In the emails, the criminals had attachments that, when clicked, secretly install “spyware” that can capture personal information and send it to third parties over the Internet.

 

With the information supplied by victims, the criminals successfully broke into the victims’ bank accounts leaving tales of woes and losses.

 

Though the financial institutions are mostly affected by cybercrimes, all other sectors are culpable and assured Nigerians that financial institutions are strictly compelled to adhere to CBN regulations to secure online financial transactions.

Emefiele, CBN Gov.

The CBN, said it is working on modalities for new regulations to stem the rising losses that emanate from cybercrime and technology risk in the financial sector.

 

Mrs. Aishah Ahmad, deputy governor, CBN, said that “There is compelling need to redesign regulations that will address risk that may emanate from the new emerging and increasing modern class of financial firms.”

 

Elsewhere, electronic transaction switching and payment processing companies are building more security layers on top of existing ones to check the activities of the fraudsters.

 

The Police on the other hand said that that the development was being monitored and that the Commission is inviting useful information that would help burst the crime.

 

 

 

 

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Renmoney Emerges Winner Of Microfinance Excellence Award

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(R - L) Yetunde Faulkner, Head of Commercial, Renmoney, receiving Renmoney’s ‘Award for Excellence in Microfinance' from Mohammed Dabai Suleyman, Director, FSS 2020, Central Bank of Nigeria, while Folasade Femi-Lawal, Head, Card Business, First Bank, looks on; at the New Age Banking Summit held in Lagos, recently.

Renmoney, a Nigerian consumer lending company, has emerged the winner of the ‘Award for Excellence in Microfinance Banking’.

 

The award was presented at the 8th edition of the New Age Banking Summit which held at the Lagos Continental Hotel, Victoria Island.

 

Other winners of the evening were: GTBank, Diamond Bank, First Bank, First City Monument Bank, Union Bank and Wema Bank.

 

Receiving the award, Yetunde Faulkner, Head of Commercial at Renmoney, said: “We’ve been working really hard to build more convenient lending solutions for Nigerians so this award will be a huge morale boost for our team!” Yetunde added, “We launched our online loan application process this year to provide loans in under 24 hours and we are looking forward to launching even better solutions in 2019”.

 

For Anisha Ajimani of the UMS Conference, the organisers of the event, Renmoney was an obvious choice for the award because of the company’s focus on technology and customer experience.

 

She said: “The New Age Banking Awards are aimed at honouring organizations that have consistently demonstrated exemplary performance. These will not just recognize the endeavours of the most successful financial organizations, but will also set a benchmark, inspiring other organizations to achieve their own goals”.

 

The theme of the two-day event was ‘Staying Relevant in the Changing Financial Landscape of Nigeria’.

 

It was attended by a wide array of industry experts comprising Chief Information Officers of financial institutions in Nigeria, speaking on various developments and challenges in the digital banking and fintech space.

 

 

 

 

 

 

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