Stanbic IBTC Holdings PLC, a subsidiary of Standard Bank Group, has called for increased partnerships amongst financial services providers and telecom operators to foster financial inclusion in Nigeria.
Equity research analyst, Standard Bank Group, West Africa, Babatunde Ogunleye, highlighted the need to improve Nigeria’s financial inclusion index.
According to him, Nigeria is yet to meet its financial inclusion targets, with an estimated 38 million adult population yet to have access to financial services.
Speaking on how to bridge the gap, Babatunde said: “this gap can be bridged through a strategic relationship between banks, fintechs, and telecoms companies. Despite the efforts of the banks to reach the underbanked and underserved through mobile money services, there is still a need for deepened penetration to be able to achieve the Central Bank of Nigeria (CBN) 95 per cent financial inclusion target by 2024.”
Citing the Nigerian Interbank Settlement System (NIBSS) recent report, which stated that over 48 million Nigerians have Bank Verification Numbers (BVNs) as of June 2021, he stated that, the financial inclusion level could be increased, given the country’s mobile phone penetration, which is estimated at 170 million.
According to Babatunde, Nigeria’s financial inclusion could be deepened using the telecom companies as they are closer to the people than the financial services providers. He noted that the Unstructured Supplementary Service Data (USSD) service could also act as a means of increasing financial inclusion in rural areas that have little or no internet coverage.
Furthermore, Babatunde advocated the synergy between fintech, banks, and telecommunications. He described increased financial inclusion levels as critical to the nation’s economic development as it helps curb the rate of poverty, reduce unemployment, and promote the growth of Small and Medium Scale Enterprises (SMEs).
He advised that granting Payment Service Bank (PSB) licences to MTN and Airtel in Nigeria could help replicate the success of mobile money in Kenya and Ghana, currently reaching millions of its citizens. Babatunde said: “the integration of mobile network operators and mobile money services is a key driver of inclusive financial services in these countries as the number of mobile users continues to increase.”
To transform the economy, he recommended that the Central Bank of Nigeria(CBN) should fast track the rollout of Payment Service Bank (PSB) licences to mobile network operators, urging them to work hand-in-hand with banks, mobile money operators and super agents in reaching and offering financial solutions to millions of Nigerians, especially, those in the remote areas.