A petty trader, Mrs. Mary Okunrinnla, in September 2024, downloaded one of the fintech apps for the first time to enhance her business transactions. Before being financially included in the banking system, Aunty Mary, as she’s fondly called in her shop, directed customers to use Point-of-Sale (PoS) agents or bring cash whenever they patronized her.
“The stress of getting my money from other people whom my customers paid to have gone. Sometimes, some people I use their accounts to collect my money wouldn’t even give me [the money] on time. But now I have my income safely kept in my account, and I can withdraw it any time. I don’t need to wait for a third party to operate my business,” Okunrinnla said.
This is one of the many Nigerians reaping the benefits of the Nigerian Financial Inclusion Strategy (NFIS) drive of the Federal Government.
According to reports, fintech has contributed significantly to reducing the number of unbanked people in Nigeria.
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A financial consultant, Mr. Tunji Adepeju, said the government and relevant agencies have been doing quite well in ensuring that people, particularly in rural areas, have access to banking or financial services.
“At least one will remember, even when we talk about community banks of those days. Now, we have these other banks that are located virtually in every segment of the country. We also have NIRSAL – the one sponsored by the Central Bank – in cooperation with NIPOST. They are using the offices of NIPOST in all rural communities to render financial services to people around there,” Adepeju said.
According to him, the most recent introduction in the ongoing efforts to reduce financially excluded people is the USSD, which allows anyone with feature phones to transfer and receive money.
USSD stands for Unstructured Supplementary Service Data. This is a protocol that allows a phone to communicate with a mobile network operator’s computer in real-time.
USSD is often used for banking, education, and other interactive services.
According to reports, in 2023, 74% of Nigerians were financially included, while 26% were still financially excluded.
This is an improvement from 2020 when 67% of Nigerians were financially included.
In the first half of 2024, Nigerians sent ₦2.19 trillion using USSD codes, a significant improvement from 2022, when Nigerians processed 515 million USSD transactions.
Adepeju said virtually everybody that has a phone can make transfers and check their account balances through their phones without visiting any banking premises.
“Incentives to farmers during the time of Dr. Akinwumi Adesina as Minister of Agriculture – before he moved to the African Development Bank – enabled farmers to receive fertilizers and other inputs through the use of phones and short codes like USSD,” he said.
He, however, noted that financial service providers, particularly deposit money banks and other financial institutions, need to improve their services to Nigerians.
Adepeju said this is especially critical in the areas of excellent and quality services and customer experience.
He also stressed the need for unbanked Nigerians to embrace change.
Another financial expert, Mr. Sola Famakinwa, said financial inclusion means individuals and businesses have access to financial products and services that meet their needs.
According to him, financial inclusion is an enabler for achieving sustainable development goals and reducing extreme poverty, as well as driving the digital transformation of Nigeria.
Famakinwa said the government needs to strengthen its monetary policy to increase the number of people and businesses participating in formal digital financial services.
He lauded the NFIS goal of reducing financial exclusion by 25%, urging the government to address interest rates and other policies.
A Treasury Accountant, Mrs. Pelumi Ukot, said financial inclusion involves providing financial services to all individuals and businesses, regardless of their income level, geographic location, or social status.
According to her, the aim is to ensure that everyone has access to basic digitized financial services, such as savings accounts, credit facilities, payment systems, insurance services, and investment opportunities.
Ukot said financial inclusion has been key to digital transformation and could help tackle poverty and inequality.
“Other benefits include promoting economic growth and development, increasing financial stability and security, enhancing access to basic services such as healthcare and education, and fostering creativity and innovations premised on digital transformation. This would empower individuals and communities to participate in the economy and contribute significantly to technological development in Nigeria, helping to distribute wealth more evenly in the economy,” Ukot said.
She, however, urged the government to ensure financial inclusion for all by implementing supportive policies and structures.
“Such policies and regulations that enhance financial inclusion and midwife digital transformation include low-cost banking services, favorable mobile money regulations, and grave penalties for defaulting banks and organizations. Infrastructure development is also crucial, involving heavy investment in digital infrastructure such as payment systems, mobile networks, and internet connectivity to expand financial services’ reach,” Ukot said.
According to her, financial education is key, and there should be a nationwide financial literacy program to educate citizens – especially those in rural areas – on the benefits and risks of financial services.
Ukot added that incentives and subsidies could further strengthen the government’s efforts.
“Offer incentives such as tax breaks, subsidies, or low-interest loans to encourage financial institutions to serve everyone,” she said.
This report is produced under the DPI Africa Journalism Fellowship Programme of the Media Foundation for West Africa and Co-Develop by Ibukun Emiola
NAN Features
