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Paga Set to Expand Agent Network

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  • Paga Set to Expand Agent Network

As stakeholders in the financial services sector and the telecommunications industry are pushing ahead with the plan to ramp up financial inclusion in the country, agent networks are gradually gaining traction.

The expansion of agent networks nationwide has been identified as critical to driving financial inclusion, as seen in other emerging economies such as Bangladesh and India.

Agents – particularly cash-in/cash-out agents – act as the entry point for financial inclusion and facilitate the crucial conversion between cash and digital money, according to the Central Bank of Nigeria.

Across the world, agents have played a vital role in offering many low-income people their first-time access to financial services.

“Agent networks present an opportunity to service people in areas that lack bank branches or other physical financial access points like Automated Teller Machines. Consequently, a functional agent network is imperative for extending financial services to the unbanked. However, deficit of fixed location agents has been a challenge,” the CBN states in the exposure draft of the ‘National Financial Inclusion Strategy Refresh’ report.

In 2010, Nigeria made a commitment to reduce the adult financial exclusion rate in the country from 46.3 per cent to 20 per cent by 2020, and the National Financial Inclusion Strategy was launched on October 23, 2012 in order to attain the target.

The 2012 NFIS defined financial inclusion as “when adults in Nigeria have access to a broad range of formal financial services that are affordable and meet their needs,” and set out the target for overall financial inclusion at 80 per cent, with a long list of more detailed targets, recommendations and an implementation plan to achieve the goals by 2020.

To attain the financial inclusion target by 2020, there must be 62 agents for every 100,000 Nigerian adults, according to the CBN.

“Currently, there are only 28.2 agents per 100,000 Nigerian adults. Issues around profitability of agent networks, agent fee structure and other environmental issues have contributed to this gap. A deliberate effort needs to be undertaken by stakeholders to address policy-related bottlenecks and rapidly deploy agents,” the apex bank says.

Mobile money operators such as Paga have helped increase the number of agents in the country despite the challenges.

The Managing Director, Paga, Mr Tayo Oviosu, in an interview with our correspondent, stresses the need for more agents in order to enable more Nigerians access financial services.

“I think that is the first thing we need to do in Nigeria. How do we scale the network of agents to every community across this country?” he adds.

As part of efforts to enable the rapid growth of agent networks, the Shared Agent Network Expansion Facilities plan was developed by stakeholders.

The CBN, Deposit Money Banks, mobile money operators and super-agents designed SANEF, which entails an aggressive rollout of a network of 500,000-agents to offer basic financial services, including cash-in/cash-out, funds transfer, bill payments, airtime purchase and government payments.

Oviosu says, “The second impediment (to financial inclusion) is the channels and access to the channels, and all these things are being addressed in different ways. The third impediment is the pricing and limits that were placed on accounts. In 2009, when we started this business, you could only send N3, 000 to someone.”

He says it took a long time for the CBN to change the rules, adding, “As at September last year, it is now N50, 000 per day, which makes more sense.”

According to him, the central bank has done the right thing by making funds available at a rate that makes sense for a 10-year-plus investment for a company like ours to invest in agent networks.

“Today, at Paga, we have 17,000-plus agents. We estimate at Paga, through our agents, we have already created over 10,000 jobs,” Oviosu says, indicating that the company could contribute 80,000 agents by 2020.

“There is a lot of opportunity for entrepreneurs. All our agents are entrepreneurs. Imagine how many jobs would be created when you have 550,000 agents. The unemployment number would go down noticeably but that is not going to happen overnight. So, we are committed to this, and we think it is a very good policy by the central bank,” he adds.

Under the SANEF initiative, the agents will also provide remote Bank Verification Number enrolment services.

“Telecom companies have a role to play. The big role that they have to play is to make sure that the infrastructure exists. We need access to base stations across the country so that every Nigerian can buy the most basic mobile phone and get access to at least 2G,” Oviosu says.

He adds, “They have to make sure that their USSD is open to all financial institutions and that it has uptime and that they are making money on it. Financial institutions should pay them; I actually hold the view that the government should not regulate that price. It could be subsidised by the CBN.”

The Paga MD highlighted the need to provide mobile money wallets that could be used for a broad range of transactions in rural areas.

He says, “To open a mobile money wallet, all you need is your name and phone number, and we are actually talking to the CBN to allow us be able to open mobile money wallets for people who do not have a phone number because not every Nigerian has a phone.

“The way we look at it is that when people open that mobile money wallet, they can then also open a bank account. From my wallet, I can access my bank, so the bank is going to provide services through my wallet.”

According to the CBN, 58.4 per cent of the nation’s 96.4 million adults were financially served in 2016, compared to a target of 69.5 per cent – leaving 41.6 per cent (about 40.9 million adults) financially excluded.

“We are very excited about the things that we are working on,” Oviosu says, adding that the company has struck partnerships with banks to expand its agent network.

He says, “Secondly, we are working with the banks to come up with savings products to be offered on our platform so that people can access savings, eventually lending and, like I said, graduating to opening a full-fledged bank account through our platform.

“These are partnerships that we are having with the banks that would really drive and help us reduce the number of people who are financially excluded in Nigeria.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Fintech

OPay Urges Customers to Complete BVN, NIN Verification Following CBN Directive

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OPay, a prominent financial services firm, has called upon its customers to finalize the verification of their accounts by linking their Bank Verification Numbers (BVN) or National Identity Numbers (NIN) in accordance with the recent directive from the Central Bank of Nigeria (CBN).

The CBN, in a circular dated December 1, mandated all deposit money banks to enforce a ‘Post no Debit’ restriction on accounts lacking BVN or NIN.

Accounts without BVN would be placed under a ‘Post No Debit or Credit’ status from March 1, as outlined in the circular jointly signed by Chibuzo Efobi and Haruna Mustapha, Directors at the Payments System Management Department and Financial Policy and Regulation Department, respectively.

OPay affirmed the CBN’s directive and emphasized the necessity for account holders to complete the verification process.

Dauda Gotring, the Managing Director/Chief Executive Officer of OPay, emphasized the importance of a secure and seamless experience for customers.

He encouraged users to comply with the verification process, reassuring them of the company’s commitment to a smooth process and 24/7 customer support.

OPay provided multiple channels for customer assistance, including in-app self-service, WhatsApp, phone lines, and social media platforms.

The company’s commitment to inclusivity and technological advancement underscores its mission to enhance financial services accessibility across Nigeria.

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Telecommunications

MTN Group Ltd. Reports 90% Plunge in Profit Amid Nigeria’s Currency Woes

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MTN

MTN Group Ltd., Africa’s largest wireless service provider, has announced a 90% decline in its full-year profit following the plunge in Nigerian Naira.

The company revealed that its earnings per share for the year ending December fell to a range of 1.07 rand to 3.21 rand (approximately 6 to 17 US cents), a significant drop from 10.71 rand recorded in 2022.

The Nigerian naira, which experienced a 49% depreciation in 2023 and an additional 44% decline this year, has emerged as a significant factor impacting MTN’s financial performance.

As one of the world’s worst-performing currencies against the dollar, the naira’s instability has created a volatile economic environment, prompting concerns among international businesses operating in Nigeria.

The currency crisis, stemming from a shortage of dollars and exacerbated by policy missteps and corruption, has led to an exodus of multinational corporations seeking to repatriate earnings from Africa’s largest economy.

Nigeria, with its burgeoning young population and growing tech sector, has struggled to address economic dysfunction despite its vast natural resources.

MTN Group Ltd., which boasts approximately 77 million customers in Nigeria, historically derives a substantial portion of its earnings from the country.

However, the company’s shares plummeted by as much as 7.2% in early trading following the profit announcement, reflecting investor concerns over the challenging operating environment.

Despite the bleak financial report, MTN highlighted positive metrics such as a 45% increase in data traffic and a 49% surge in mobile money transaction volumes.

However, the company refrained from providing guidance on its earnings margins, further adding to uncertainties surrounding its future financial performance.

Analysts underscored the importance of regulatory stability and economic reforms in Nigeria to restore investor confidence and mitigate the impact of currency fluctuations on companies like MTN.

As businesses navigate the economic landscape, the resilience of Nigeria’s currency and regulatory framework remains a critical concern for investors and industry stakeholders alike.

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Leatherback Set for International Growth as EFCC Drops all Fraud and Misconduct Allegations

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Nigeria’s Economic and Financial Crimes Commission (EFCC) has dropped all allegations of fraud and misconduct against Leatherback, a leading financial services technology company, and the company’s CEO, Toyeeb Ibrahim Ibitade.

In November 2023, EFCC announced that it had been made aware of the possibility of fraudulent activities on the Leatherback platform, leading to an investigation into the company’s operations to establish the facts. Cooperating fully with EFCC and working transparently with the organisation’s officials to provide a forensic view of its operations, Leatherback was able to unequivocally prove its innocence, leading the EFCC to drop all allegations and take down all previous communications on its website and social media platforms (Facebook, Instagram, and Twitter) around the matter.

Leatherback supported the EFCC investigation by making over 5,000 printed documents available to officials to enable as much clarity as possible. Leatherback also filed Suspicious Activity Reports (SARs) in the UK and Nigeria.

According to Toyeeb Ibrahim Ibitade, CEO of Leatherback, “I am relieved to see the end of this arduous episode, but I am even more delighted to see that myself and Leatherback, as an organisation, have been completely cleared of all wrongdoing. With this episode firmly behind us, we are poised to accelerate our mission to provide a single access point that empowers individuals and businesses to be truly global, delivering best-in-class financial, payment, and commerce solutions that remove barriers to global growth and mobility for all citizens of the world.”

Headquartered in London, Leatherback is regulated in the United Kingdom, Nigeria, Ethiopia, Canada, India, Pakistan, Nepal, and Sri Lanka, enabling the platform to serve customers across a wide range of markets effectively. Tens of thousands of individuals and businesses already use the platform to support business and lifestyle opportunities every day. Leatherback is also FCA Authorised, PCI DSS Compliant, and ISO Certified.

About Leatherback

Leatherback offers financial services to businesses and individuals in multiple countries with no restrictions. Users can access up to 15 currencies from 21 countries, including NGN, GBP, INR, EUR, USD, and many other currencies. Users can also send and collect money locally and internationally, with invoicing, analytics, and permissions features available for businesses.

For more information, please visit: http://www.leatherback.co

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