By Franklin Alli
Enhancing Financial Innovation & Access (EFInA), an independent, professional, non-profit organisation, has disclosed that about 130 million Nigerians do not have bank accounts.
As a result the organisation has therefore charged both commercial and micro finance banks in the country to look beyond branche expansion, and go after the 130 million representing 79 per cent of over 140 million Nigerians without bank account.
Speaking at a workshop on ‘Increasing Access to Finance through Agent Banking, in Lagos, Tuesday, Chief Executive Officer, EFInA, Modupe Ladipo, said that the banks can do this by embracing “Agent Banking” at designated points in the cities and rural areas across the country.
“With a rapidly growing population of over 140 million people, Nigeria remains largely ‘unbanked’ with only 21 per cent of the adult population(11,060,000) having a bank account, while 79 per cent or 128,940,000 have no bank account,” she said
According to her, “Following consolidation in 2005, Nigerian banks embarked on aggressive retail banking strategies and branch expansion programmes, but this is an expensive approach to securing smaller, low value deposits. The Innovation Forum provides an arena to discuss the concept of providing financial services through existing retail outlets and a network of agents and thereby bringing these services closer to low income customers, especially those in rural areas.
“Using Point of Sale devices and/or mobile phones, banks and customers can interact through retail agents in a secure manner. Agent networks sometimes called business correspondents, have been successfully rolled out in other emerging markets including Brazil, Columbia, India, Pakistan and Kenya to name a few.”
Keynote speaker , Frederick Eijkman, CEO of Pep InterMedius Limited, a financial services firm in Kenya that manages a network of over 150 agent outlets and is the leading cash distribution network for Kenya’s successful mobile money platform M_PESA, said: “The average size of each transaction is $25 and through our agents we conduct over 250,000 cash-in and cash-out transactions per month. The total value of transactions is over $4 million per month.”
He further stated: “A robust agent network is critical to the success of any branchless banking distribution model, this Forum is timely as the Central Bank of Nigeria is currently undergoing the licensing process for mobile payment services.”
The workshop brought together financial services stakeholders and mobile network operators from across the country to discuss ‘agent banking’ an innovative approach to providing banking services to the unbanked and underbanked population in Nigeria.
EFInA is funded by the UK’s Department for International Development (DFID) and the Bill & Melinda Gates Foundation and its purpose is to promote access to financial services for the unbanked and the underbanked in Nigeria.