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How Fintechs Are Closing the Banking Gap

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By Adeniyi Ogunfowoke,

Over 60 million Nigerians are unbanked. This simply means there is a huge banking gap that needs to be bridged. Unfortunately, a large population of the unbanked or underbanked are located in rural areas. In these areas, there are just a handful of financial institutions. This is one of the reasons why Nigeria’s apex bank, the Central Bank of Nigeria is encouraging banks to open more branches, especially in rural areas. The question now is for how long? This question arises because there is a dire need to bridge the gap.

Fortunately and thanks to technology, the concept of fintech came up and it has unarguably disrupted the financial scene. The most staggering impact it is having is that it is making inroads in helping to close the financial gap between the banked and the unbanked. So, how are fintechs pulling this off? Read to know some of the ways.

Online lending

Online lenders are on the rise, and with that blooming industry, the need to drive to a local branch and sit down with a banker to apply for a loan is fairly obsolete. Instead, rural residents can apply for loans from their smartphone wherever they are. Many traditional banks allow online application and they will take forever before they respond. However, for fintechs, they will lend you huge sums of money within 24 hours, as long as you meet their criteria.

Making payment seamless

Paying for online services is no longer rocket science. It is accessible to everyone notwithstanding whether you are in the rural or urban area. Of course, you must have an internet connection. So, you can order and pay without issues. For example, with Jumia Pay, you can pay for food, hotel and groceries you ordered online and it will be delivered at your doorstep. This has, to a very large extent, reduced cash-on-delivery payments. Therefore, you do not need to keep wads of cash at home just because you want to pay for your order.

Business banking integration

Many rural residents own farms, ranches, and home-based businesses, and so banking access is more than just depositing a paycheck or needing a debit card. Customers with business-based banking needs can also, through fintech, integrate their business banking into those same apps and online access. Accounting software can link bank accounts and accountants as well, offering even more of a streamlined experience. Additionally, people can now easily apply for small business loans without having to travel to a bank or lender, making it much easier to access capital when necessary.

The simplicity of the process

Fintechs are having a gigantic leeway because their modus operandi is not cumbersome. It’s quick, fast and responsive when compared to the banks. Due to this, this has encouraged Nigerians to use them. Also, the number of fraud cases are considerably low in comparison to the banks. Due to this a lot of people are very much attracted to them.


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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E-Financial

CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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