Olaoluwa Awojoodu has an unquenchable desire to succeed. He developed the framework and model for CashEnvoy, one of the leading web payment solutions in Nigeria and without any significant capital, built E-Settlement Limited into a major player in the Nigerian payment space.

He is also the brain behind PayPad, Nigeria’s first and leading mpos solution. In this interview he speaks on access to basic financial services and overall financial inclusion in Nigeria.

Can you provide a broad overview of how E-Settlement is advancing financial inclusion in Nigeria?

We have an expanding network of more than 50,000 active agents and payment solutions across the nation securing access for harder-to-reach and non-urban areas that ensure financial services can reach the under-served across Nigeria. Our partnership approach to financial inclusion and creating jobs means we advocate for innovation by focusing on financial education, entrepreneurship, and engineering economic growth by way of tech. Our solution is efficient and provides a convenient way to conduct financial transactions.

What are the basic financial services required for anyone, especially vulnerable groups to be truly included in the economy and access better living opportunities, and how can these be designed to serve them?

To be able to meaningfully gain access and ease the process of attaining better living standards, there are basic financial services that are required, and these include microinsurance, savings products/services, microcredits, remittances, digital payment and money transfer services and products. Microinsurance provides a safety net and a mechanism for protection against shocks, they are affordable hence suitable for low-income individuals. The impact of COVID-19 might have been less invasive if we had more developed microinsurance solutions and innovations with a corresponding uptake by vulnerable groups. It will be interesting to see more microinsurance solutions and campaigns to increase uptake by the private and public sectors.

Access to savings and microcredits provides another form of protection against unforeseen circumstances. Payment and transfer services present a means for wealth distribution and ensure that unbanked individuals can pay for basic services and receive payments for services or products rendered. For these basic financial services to serve vulnerable groups, they must take their peculiarities into account. For example, there should be less expensive documentation requirements – like an ID or collateral – and it should be such that they can access and mimics what they are already used to but with an added level of security.

According to EFInA’s Access to Financial Services 2020 survey, economic and health-related shocks negatively impacted the finances of 3 out of 5 adults over the past 12 months. How can access to basic financial services alleviate shocks for the bottom of the pyramid and deepen their resilience?

When shocks happen, low-income individuals and their families – who are already struggling to make ends meet- are usually less prepared and thus, less resilient and hardest hit. They are less likely to have financial safety nets because of limited access to basic financial services. Hence creating easy access to basic financial services like micro credits, savings, insurance and digital money transfer systems creates a safety net to help alleviate their suffering. Access to these types of financial services is important as it creates a pipeline or link to emergency funds that can be retrieved to meet emergency fund requirements. It will ensure that vulnerable groups are better prepared to face shocks. But this can only be effective and achieve widespread success if all barriers are removed and there are high levels of uptake amongst vulnerable groups. Improving access to financial services will position vulnerable groups to avoid adopting coping measures that are costly and detrimental to their overall economic conditions and will help them to mitigate the impacts of different levels of shocks.

Many vulnerable Nigerians remain unbanked for a myriad of reasons including bank charges, required documentation, proximity, limited education and financial literacy amongst others. How can financial services and products be designed to overcome many of these barriers?

First, it is important to design solutions that consider the peculiarities of vulnerable groups. These include their financial literacy levels, trust levels, access to requirements like collateral, documentation and their location. This will ensure that whatever solutions are designed, bypass existing barriers while also being attractive enough for them to use. Other ways to address these barriers include looking beyond the traditional brick and mortar banking system and adopting mobile money solutions and agent banking networks – just as we do at E-Settlement. The delivery of financial education and literacy programs will go a long way in bridging the trust gaps that exist. It provides a means to explain how the banking and financial services system works thereby promoting transparency that improves trust levels.

Women are more likely to be excluded than men for several reasons including low-income levels and cultural expectations. If available solutions are to overcome these barriers, it is important to increase women’s access to economic empowerment opportunities and find ways to infuse elements of their culture in the design of solutions. For example, in the northern region, a female financial services delivery agent will have more success engaging women in the region. Most importantly ensuring that available financial services are affordable will encourage low-income individuals to become included and use these services.

We saw how the pandemic affected the sources of income of vulnerable Nigerians and how that lack of access to funds pushed many further down the poverty ladder. What is the role of agent banking and mobile money solutions in similar situations and how can these be leveraged to ensure proper targeting of government and private sector-led interventions?

Agent banking and mobile money solutions have the capacity to reach rural and hard-to-reach communities hence offer a means through which social interventions and other funding can reach low-income communities during a shock. For reason, low-income communities have easier access to mobile money and agent banking solutions compared to traditional banks that require long-distance travel that is expensive and unconducive in many cases. Partnerships between the government and agent banking operators can provide more success when targeting low-income individuals. Funds can be distributed through mobile money and agent banking operators because they are already available in rural areas. In the wake of the pandemic, the Kenyan government designed an e-voucher programme allowing farmers to receive vouchers on their mobile phones and then exchange them for partially subsidised farm supplies based on their individual and household needs.

Experts have alluded to the potential of access to financial services in solving many of the socio-economic challenges, like poverty. What will you recommend as a sustainable solution to ensure that there is access to basic financial services in hard to reach and rural communities?

There needs to be greater levels of synergy between all players including the government, mobile network providers, fintech and banks. When it comes to providing access for the bottom of the pyramid there needs to be a shared goal of ensuring they are protected for the greater good. Partnerships between the government and existing fintech players (agent bankers and mobile money providers) and regulations ensure that these players can continue to thrive. Funding and investments are required to ensure that fintech players providing basic financial services can scale and expand their services to harder to reach areas hence ensure access for more people. For us at E-Settlement, funding means that we can expand our existing agent network from over 60,000 to 200,000 within the next few years.