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Propelling financial inclusion in Nigeria – The journey so far


Just a decade ago, Nigeria was heavily dependent on the traditional banking model for financial services and transactions. The need to transform the industry was obvious. In the eastern part of Africa, Kenya had begun the financial turn with M-Pesa. Launched in 2007, the service allows users to pay bills and send money through mobile phones or an agent network, regardless of whether they have bank accounts. As a result, the service impacted access to economic services with financial inclusion in Kenya rising from 27% in 2006 to 83% in 2019.

In 2012, Nigeria took major steps in its journey by launching the National Financial Inclusion Strategy (NFIS). The main goal of the NFIS is to ensure that 80% of Nigerian adults are financially included by 2020. Before this, the formal use of financial services by the adult population stood at 36.3% in 2010. To achieve the 2020 goal, the Central Bank of Nigeria (CBN) also introduced agent banking guidelines to operators. The guidelines allow mobile money operators and other financial institutions to appoint third parties as agents to provide these services on their behalf. The strategy spiked innovation in the financial services sector in Nigeria and by 2017, CBN had given over 20 licenses to mobile money operators.

According to the 2018 Access to Financial Services Survey by Enhancing Financial Innovation and Access (EFInA), 36.6 million adults, representing 36.8% of Nigeria’s adult population, were still financially excluded. In a recent survey by Augusto & Co on Consumer Digital Banking, only 34% of the respondents said they had experienced the service of digital banks. Only 17% of respondents above the age of 55 are aware of their services, while for people aged 41-54, the awareness rate stood at 31%. This spells the need for deeper agent banking if Nigeria is to attain the NFIS target.

In 2019, Y’ello Digital Financial Services (YDFS) rolled out MoMo Agent service across Nigeria to provide safe and accessible money transfer services to financially underserved communities. A subsidiary of MTN Nigeria, YDFS utilises its wide network of over 108,000 agents to deliver these services to under and unbanked communities. Recently, the financial service provider expanded to further deepen the financial inclusion drive, with the MoMo agent service now providing bill payment, cash deposit and withdrawal, data and airtime purchase, and bulk disbursement services to anywhere in Nigeria without a bank account.

Despite the advent of the pandemic and the antecedent economic variables that were brought to play in 2020,the CBN recently reviewed the financial inclusion strategy to understand the current state of financial inclusion in Nigeria, assessing past approaches, lessons learnt, research reports, data analysis and stakeholder engagements. Its key findings state that Nigeria has made significant progress to implement the NFIS. From the revision, it is estimated that about 500,000 Agents should be available to serve about 105 million adult population in Nigeria by the end of 2020, which will result in a financial inclusion rate of 95% by 2024.

It is imperative that as a country we do not lose sight of the future we all dream of- one where more individuals of the nation can boast of financial freedom that boosts our economy and places us alongside many developed nations. The journey into the next decade will show how well we achieve this.

Ilo is a freelance data analyst in Lagos who has an interest in Nigeria’s digital economy



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