By Providence Emmanuel

STAKEHOLDERS and regulators in the microfinance subsector have harped on the need to use digitization as a tool for deepening financial inclusion in order to achieve the goal of empowering Nigerians. They stated this at the second Financial Inclusion Seminar of Accion Microfinance Bank (AMfB), with the theme: “Digitization as a Tool for Deepening Financial Inclusion and the Role of Regulation.”

Operators fault new minimum capital requirement for MfBs

Speaking during the panel discussion, an official of Financial Inclusion Secretariat, Central Bank of Nigeria (CBN), Mr. Steve Awe, hinted that the CBN had set up a state level financial inclusion steering committee to take decisions and address problems arising from the states. He stated: “We realised we cannot sit in Abuja and Lagos to take decisions on financial inclusion, so we decided to set up a state level financial inclusion steering committee and there are efforts in place to further drive innovative digital financial services.”

Earlier in his welcome address, Chairman, Accion MfB, Mr. Patrick Akinwuntan, said that there is the need to begin to look at the changing landscape in the sub sector. He said:  “We have participants in the microfinance sub sector and the sector is classified along unit, state and national, the big difference has been the ability to build infrastructure to distribute. We are around 40 percent in terms of financial inclusion and there are 190 million Nigerians out there. There is so much ground to cover, we need to collaborate more in order to advance and leverage technology to make the cost of access cheaper.

“The idea that a microfinance entity operates within a local government, state or country is already obliterated by the ubiquity of the mobile phones in practical terms. We would like the regulators to see that the landscape has changed so that we can begin to have access to unleashing the potentials of people that want to engage in the collaborative activity in the microfinance phase and increase access to finance. Access to finance requires us to leverage technology to look at the behaviour pattern and the trends.”

On his part, Managing Director/Chief Executive, Accion MfB, Mr. Taiwo Joda said digitization is critical to breaking boundaries and frontiers’, adding that digitization is not just critical to the Nigerian Stock Exchange, NSE, but to the financial landscape.

He stated: “We must drive digitization and automaton of our process to drive scale and reduce cost of doing business. Financial inclusion is evolving and again, CBN is introducing new regulation as regards capitalization to stem the exit of MfBs and also protect depositors fund. CBN is looking at a capital base that would ensure sustainability of microfinance operation in Nigeria and also give customers the confidence to continue to deal with MfBs.

“If rightly applied, it would encourage the driving and depth of financial inclusion. The National Microfinance Platform is engaging with CBN and promises to be a win-win situation. MfBs are driving to deepen financial inclusion in Nigeria and at the end we are going to have a regulation that will create that environment to deepen microfinance.

“If MfB customers are running away for fear of survival then it is going to work contrary to MfBs, but then, if we have un-scalable level of capitalization that MfBs cannot meet, it also affects the deepening of financial inclusion,” he added.

Meanwhile, Business Head, Strategic Partnerships and Projects, Paga, Mr. Chidiebere Asiegbu, urged government and regulators to influence partnerships that would bring about investment in digital financial services, while calling for awareness campaign that would drive and further scale up digital financial services in the rural area