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CBN Deepening Financial Inclusion Through UP

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  • CBN Deepening Financial Inclusion Through UP

The Central Bank of Nigeria and Nigerian banks have appointed UP, Nigeria’s premier financial technology company otherwise known as “Unified Payments” with a view to increasing access to finance for poorer communities in remote locations.

UP is a super-agent with a mandate of the CBN and Nigerian banks to take the services of banks and other auxiliary services to those who do not have access to such services today.

“UP is leveraging technology because as a Fintech, we are convinced that with the appropriate technology, people can have access to digital financial services even without walking out of their homes or where ever they are,” says the Chief Executive Officer and Managing Director of UP, Agada Apochi.

The apex bank had introduced the Shared Agent Network Expansion Facility initiative with a view to spurring quick growth in the level of financial inclusion through availability of financial access points, especially in the Northern part of the country.

“The banks and CBN have come together to say that if the desired objectives are to be achieved, there is the need to ensure that there is a structure and a framework that will lead to expansion of agency services or network,” Apochi says.

Financial Technology is fast becoming a tool for making financial services more accessible to people living in the rural areas. For instance, remittance through mobile has been growing at a fast pace in Africa due to the proliferation of mobile phones, with some countries taking the lead in mobile money service.

While the number of unbanked has reduced in recent years, the large chunk of people without access to any form of financial service are in developing countries. According to a recent report by World Bank’s Global Findex Database, 118 million Nigerians do not have bank accounts.

The report also states that there has been a decline in financial inclusion in the country, but it adds that there is room for improvement.

“Nigerian adults who are 25 years and above with bank accounts declined by five basis points from 49 per cent in 2014 to 44 per cent in 2017,” says the report.

The data shows that 51 per cent of Nigerian males had a bank account in 2017 compared to the 27 per cent recorded for females; this brings the gap between the male and female to 24 percentage points.

Apochi is optimistic that the country will move from where it is to a better place in terms of financial inclusion. He adds that the number of those who are currently excluded would reduce as policymakers are collaborating with telecommunications firms, banks and Fintechs to deepen financial inclusion.

“Between January and today, the numbers are changing positively because this is receiving the appropriate attention that it deserves from the Central Bank of Nigeria and Nigerian banks,” Apochi says.

The Managing Director of Lagos-based financial advisory, Afrinvest Limited, Ayodeji Ebo, says the CBN needs to manage the level of risks in financial inclusion and license the telcos to come up with more financial products that will widen the gap of financial inclusion, which they don’t currently have.

Experts say Nigeria has the potential of becoming a major player in the global Fintech market as it is endowed with young population and exponential mobile phones users.

The Nigerian Communications Commission says the number of active mobile phone lines in the country rose to 144 million in December 2017.

According to the World Bank report, mobile money drives financial inclusion in sub-Saharan Africa, as only eight countries in Africa – Burkina Faso, Côte d’Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe – recorded 20 per cent or more adults using only a mobile money account.

Kenya is using Mpesa, a mobile money application, to reduce the number of people without bank accounts as financial inclusion continues to grow and people excluded from any form of financial service dropped from over 40 per cent of adults to 17 per cent between 2006 and 2016.

And that growth is continuing as the number of Kenyans not using any form of financial service declined from 25.10 per cent in 2013 to only 17.40 per cent in 2016. The inclusion was driven largely by mobile services, used by 71 per cent of adults, as well as mobile banking services such as M-Shwari, Equitel and KCB-M-Pesa.

Apochi says a lot of entrepreneurs, start-ups, and Small and Medium-scale Enterprises have keyed into the UP model as the number of people or organisations that have been appointed as agents have risen.

“If you look at the entire value chain, there are different roles that people can play. There are those of us like UP that have been appointed as super agents, and working with agents. Different entrepreneurs can work with us and serve as agents or agent managers,” he says.

Nigerian firms are set to reduce financial exclusion by introducing more products that will make it easy for people to carry out bank transactions. eTranzact is set to deepen financial inclusion by expanding its PocketMoni service with 10,000 active mobile money agents, through the CBN-funded Shared Agent Network Expansion Facility initiative, within the next 24 months.

Apochi is of the view that the SANEF initiative is coming at the nick of time and there is no right time to make an inroad into the Nigerian market.

“The earliest of times is always the best for things desirable, but it is never too late. It should be appreciated because it is something done by Nigerian banks based on not-for-profit, but as a patriotic and Corporate Social Responsibility.

“The banks are trying to reach out to the poor, those who are disadvantaged, and those who are excluded and so it is not too late because it is being done now,” Apochi adds.

“UP is leveraging its indigenous payment solution, ‘PayAttitude digital’, to reach the length and breadth of Nigeria through the Shared Agent Network Expansion Facility of the CBN and money deposit banks. With an effective and efficient seamless operation, it offers account opening, deposit and withdrawal of cash, etc. at agent locations using just customer’s phone number” – Says Apochi.

Apochi further stated that to link a bank or prepaid account, or become agents or agent managers can be achieved through self-service by downloading the ‘PayAttitude Digital’ app or register by dialing *569# (USSD).

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

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Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

The Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has pledged to adopt accommodative monetary policy stance in 2021 in order to support economic growth in the country.

Emefiele, said this on Friday, while speaking at a CBN/Bankers’ Committee’s initiative for economic growth, which is a one-day special summit on the economy by bank chief executive officers.

The theme of the summit is: “How to Overcome the Pitfalls of Recession.”

Nigeria’s economy recently came out of recession, according to the Gross Domestic Product report for fourth quarter 2020 released by the National Bureau of Statistics.

Owing to the slump GDP growth of 0.11 per cent that lifted the economy out of recession, Emefiele said it was imperative that, “we do all we can in 2021 and beyond to ensure that we build on the positive momentum and strengthen our efforts at stimulating growth.”

He expressed optimism that with the discovery and deployment of vaccines worldwide, 2021 would be a year of massive global recovery and Nigeria must not be left out.

“The banks CEOs are here, whether by moral suasion or by force, they will have to participate in this journey. In order to drive and sustain this recovery therefore, we need to sustain the accommodative fiscal and monetary policy measures aimed at improving access to finance for households and businesses.

“Secondly, we must prevent a resurgence in Covid-19 related cases. Thirdly, we must ensure that a significant number of our population is significantly vaccinated and also improve foreign exchange inflows into our country,” he added.

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Banking Sector

CIT Microfinance Bank Disburses Over N16bn Loans

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CIT Microfinance Bank Disburses Over N16bn Loans

CIT Microfinance Bank Limited says it has disbursed about N16bn loans since it commenced operations as part of its contributions to the financial sector and empowerment of businesses.

The Managing Director of the microfinance bank, Mr Kingsley Eremionkhale, disclosed this during the company’s 10th anniversary in Lagos recently.

He reiterated that the bank was committed to supporting the growth of small and medium-scale enterprises in the country.

“Since inception, we have disbursed loans worth about N16bn. Our operation is not just about profit-making, but we have impacted many lives, empowered many businesses, and done a lot in terms of our core mandate as a microfinance bank.”

While appreciating its customers who had been loyal to it for years, he said it was concerned about their business success.

The managing director said, “We are part of our customers’ businesses. We provide services beyond lending and savings products and we also give financial advisory services.”

He appreciated the customers who had stayed with the financial institution for many years.

The managing director noted that the MfB is a state-licensed bank operating in Lagos, and a subsidiary of Capitalfield Investment Group.

He also attributed the success of the MfB to the board of directors which it said had been supportive, the management team and its workforce in the past 10 years.

While saying that the bank could lay claims to exponential growth, he said the public should expect more from it.

He also said that it was driving its operations through its digital offerings and our e-channels, to improve its services to our customers.

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Finance

FMDQ Approves Valency Agro’s N5.12bn Commercial Paper

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FMDQ

FMDQ Approves Valency Agro’s N5.12bn Commercial Paper

FMDQ Securities Exchange Limited has announced the approval of the quotation of the Valency Agro Nigeria Limited N5.12bn Series 1 Commercial Paper under its N20bn CP Programme on its platform.

The Exchange said in fostering the development of the Nigerian debt capital markets, it had continued to avail its credible and efficient platform as well as tailor its listings and quotations services to suit the needs of issuers and registration members through innovative and uninterrupted service delivery.

It said in a statement on Thursday that the Valency Agro Nigeria CP debut issue came at a time when the Nigerian economy was bedeviled with soaring food prices, amidst compounding challenges of insecurity.

It said the agricultural sector and its attendant transformation agenda had never been more important in driving increased and sustainable production of agricultural products as well as the derived foreign earnings through exports.

The Exchange said the proceeds from the issue of the CP would be applied by Valency Agro towards meeting the mid-term working capital requirements of the various agricultural produce under its portfolio such as cashew, sesame, cocoa and in value addition prior to export.

The Executive Director, Valency Agro Nigeria Limited, Mr Sumit Jain, was quoted as saying, “We are thankful to our investors towards showing their faith in our agenda to grow the agriculture-focused business with a clear aim to maximise value addition and create employment opportunities in Nigeria.

“We would also like to commend the efforts made by FBNQuest Merchant Bank Limited’s team to build the reach and FMDQ for their unconditional support for the industry”.

The Head, Capital Markets, FBNQuest Merchant Bank, Mr Oluseun Olatidoye, said, “FBNQuest Merchant Bank Limited is delighted with the successful debut of the N5.12bn Series 1 CP issued by Valency Agro Nigeria Limited. This reiterates our effort to enable underserved sectors access the debt markets, optimise their capital structure and further deepen the domestic capital markets.

“We are proud of the instrumental role FBNQuest Merchant Bank played in this transaction and appreciate the trust the management of Valency Agro placed in us to assist them. Our clients remain our priority, and we strongly believe their success is our success.”

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