The planned introduction of branchless banking in Nigeria by 3Line Card Management in partnership with some Nigerian banks has excited experts in the industry.
The company is set to unveil light banking services, which would be referred to as “Street Banking”, and would include sets of transaction such as cash withdrawal, fund transfer and fund load to the under_served and unbanked group.
Speaking at a financial services technology forum hosted by the industry umbrella body, E_Payment Providers Association of Nigeria, (E_PPAN) with the broad theme, Exploring Card to Capture the Bottom of the Pyramid, General Manager, 3Line, Mrs. Funke Ade_Ojo in her presentation “Financial Freedom for the Masses” advocated that the co_operation model of branchless banking, using third party agent networks would be an assured means of reaching the unbanked.
According to her, the pre_requisite condition for the take off of this model is a well organised cash agent network, which would work in tandem with regulations that are applicable in the financial sector with a secure cash management solution. She pinpointed that cards and point of sales (PoS) terminals with the potential for mobile money collaboration in future is the “Holy Grail for mass financial access to the unbanked communities in Nigeria”.
While lauding the Central Bank of Nigeria (CBN) and its visionary role in creating an enabling environment for this initiative by granting the company the approval to roll out its branchless banking products , 3Line is building a branchless banking agent network called the FREEDOM NETWORK that would enable financial institutions in the country to provide light banking and insurance services to the bottom of the pyramid (BoP) at a fraction of the current industry cost.
Specifically, since branchless banking services are an integral part of the company’s vision to champion inclusive financial services in the country, the company had recently collaborated with FinBank to take FlashWallet Card to the market. Customers of FinBank who operate FlashMeCash can now use their FlashWallet cards at over 8000 ATMs in Nigeria.
3Line has carved a niche for itself as the leader in the provision of financial access to under_served and un_banked segments leveraging on its transaction processing and e_payment infrastructure and card Freedom Card® scheme. Due to the practical challenges and huge costs of building bank branches in all under_served areas banks will partner with 3Line to take light banking financial services to the semi urban and rural areas of Nigeria.
Managing Director and CEO, Nextzon Business Services, Mac Atasie, defined BoP as the largest yet poorest socio-economic group. typically living on less than N500 per day in Nigeria. He therefore commended 3Line’s initiative of bringing BoP into the financial services system.
Tracing the unique characteristics of BoP class to show that the people have less money and spend about 80_95% of their income on food, shelter and clothing alone, he painted the transaction profile to include largely simple and inexpensive; usually micro_consumers and micro_producers; dependent on remittances from families and other reliefs. He therefore made a case for cards as an instrument for financial inclusion.
According to him, the market estimate for cards business amongst the BoP is huge and should not be ignored. “These are the low income professionals such as government workers, teachers, post office workers and the petty traders”. Others in this category include the artisans, students, drivers, and other unskilled labourers.
Also, acting Director, Banking & Payments Systems Department, CBN, Mr. Abayomi Atoloye, however, stated that for the card industry to fully develop and attract the unbanked into the main stream of financial inclusion, the regulatory could implement a compensatory financing system that rewards organisations that have successfully bridged the gap for the unbanked.
Besides, he said existing government payment programmes could be a powerful mechanism to draw more people into the formal financial services system thereby enabling them to save money, make electronic person-to-person payments such as poverty alleviation programmes, pensions, and salaries among others. “These payments could be tied to card related accounts to promote literacy and familiarisation with the electronic payments system,” he said.