We are addressing cost issues – CBN •Why innovation is critical, by David-West
By Prince Okafor & Elizabeth Adegbesan
Leveraging the increasing partnership with banks across the country, Financial Technology (Fintech) firms have received funding support in excess of $250million from local deposit money banks in the last five years.
This was disclosed by the Managing Director Ecobank Nigeria Limited, Patrick Akinwuntan, at the Vanguard Economic Forum series on mobile money market and Fintech, with the theme, ‘Leveraging Fintech Innovation for Unlocking Growth and Competitiveness in Nigeria’s Mobile & Payment Ecosystem’.
At the backdrop of this disclosure key speakers at the forum harp on the need for cross-industry integration for realising the objectives of financial inclusion in the mobile money industry.
Akinwuntan stated that, the nation is currently home to over 250 Fintechs and approximately 60 per cent of them supporting payments and lending capabilities.
Giving further insight into the potentials of the industry, Akinwuntan frther stated: “Nigeria remains a dynamic market with a lot of opportunities for digital financial services expansion as about 50.1 percent of the nation’s population are women, 63.1 million or 63.3 per cent are based in rural areas who are yet to be harnessed into the mobile money industry.
“Looking at the evolution of banking from 2011 where we have 51 percent of the world’s banked population to 69 per cent in 2017, while for Sub-Saharan Africa, where the universal financial access has evolved from 24 per cent in 2011 to 43 per cent in 2017, there are still much room for growth.
“Also, 56.7 million or 56.9 per cent are 35 years and younger, 20.2 million or 20.4 per cent have no formal education, while the average household size is made up of five people with less than two income earners per household. These are numbers that are expected to be integrated into the system as the economy improves.”
On the role of Ecobank in the dynamics he stated: “There is an increased partnership with banks, for example, Ecobank anchored a major Fintech challenge in 2018 and providing supporting infrastructure for some Fintechs also.
Meanwhile, the Central Bank of Nigeria, CBN, has identified cost of service as a major bottleneck in the growth of the nation’s mobile money market.
Deputy Director, Payment System Department, CBN, Musa Jimoh, who also spoke at the forum said: “Cost of service is one of the reasons why people refuse to use some banking services including mobile money.
“So we came out with a guide to bank charges to make sure that we regulate the charges and we have also come out with some other initiatives under the cashless scheme to see how we can bring people to the digital channel and reduce the high cost of operations in the bank.
“There are several initiatives that CBN is pushing to ensure the mobile money operators grow and help us deepen financial inclusion.”
Earlier the keynote speaker at the forum, Professor Olayinka David-West, Academic Director, Lagos Business School, LBS, explained that financial inclusion is the access to unleash affordable financial services to the huge population of the unbanked and the under-banked in the society.
She stated: “Affordable financial service is important because not everybody can afford to pay for account maintenance of N500 a month.
“To address financial inclusion, innovation is important because it will help us address the easy access to financial services. It has nothing to do with literacy; it is about how do we design it knowing the capabilities of the people we are trying to serve. So is a user interface problem that we need to think creatively about.”