Inclusion is gain. Exclusion is pain. As a cub reporter in the 80s, a few senior colleagues excluded me from some juicy assignments. They have formed an exclusive group. These reporters gained access to breaking news, exclusive interviews, and reviews. My former editor queried me. By sheer serendipity, a member of the senior boys met me at a certain ‘location’. This encounter tilted the game in my favour. Thereafter, he constantly invited me to assignments. Why?
On The One Hand
According to the World Bank, financial inclusion means providing useful, relevant, and affordable payments, credit, and insurance services to financially excluded individuals and SMEs. In a KPMG report, “The Nigeria Financial Inclusion: the Way Forward,” many Nigerians (market women, artisans, roadside shop owners, etc.) face different financial exclusions. Illiteracy, social class, location, and employment type are factors responsible for their status.
On The Other Hand
The report shared that these individuals lack access to affordable, useful, and relevant financial services. “This lack translates into limited economic well-being, as the excluded individuals feel little or no impact during periods of economic growth.”
In The Long Term
The report shows more than 1 in 3 Nigerian adults are outside the formal financial system. What does this mean? They do not have access to the financial services stated above. Outside of the 106 million adult Nigerians polled in 2020, 44.8 per cent were banked, while formal and informal service providers served 5.7 per cent and 13.6 per cent. These service providers include Ajo and Esusu collectors (daily contributions). The report showed that this is the current reality of Nigeria’s financial inclusion campaign. This is 12 years after the big push for financial inclusion began in 2012.
In 2010, Enhancing Financial Innovation and Access (EFInA) released its maiden financial inclusion survey. It revealed that 36 per cent and 54 per cent of Nigeria’s adult population were formally included and financially served respectively. After a decade, the various capital raising rounds (over $600 million) by over 250 fintech firms have not yielded positive results. The issuance of mobile money and PSB licenses has not met its objectives. The support of initiatives such as Shared Agent Network Expansion Facility (SANEF) and digital identities has not pushed the button.
Is that why a World Bank report said Nigeria is among the seven countries with half of the world’s unbanked? “When you look closely at the data, you will see that it would take about 40 years to reach a 10 per cent financial exclusion rate,” the KPMG report revealed. During this big push, Nigeria peaked in financial inclusion between 2010 and 2014.
An additional 12 per cent of adult Nigerians had access to financial services. Then we stalled. The financial inclusion performance between 2014 and 2018 was 48.6 per cent. As the effort to increase the monetary inclusion rate rises, there is a tendency to ask, ‘Are the existing fintech business models and products suitable and sustainable for the unbanked?’ the report suggested.
In The Short Term
Before the cash crunch brouhaha, many Nigerians did not trust bank transfers. It was cash or no deal. Bank transfers have surpassed PoS transactions now. What does this mean? Inclusion is profitable. That was why the senior boys invited me.
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