Lagos Business School, supported by the Bill and Melinda Gates foundation, has launched a research project to address the regulatory gaps and market structures disabling financial inclusion for poor unbanked Nigerians.
The launch, which took place at the Federal Palace Hotel, Victoria Island Lagos on Thursday, January 21, 2016, featured an interactive session with leaders drawn from the digital financial services industry.
The research project is titled “sustainable business models for delivering digital financial services to lower income unbanked citizens of Nigeria”.
“Financial inclusion is a catalyst for economic development and growth and we are very excited about this project because access to financial services can improve the lives of the poor,” says Dr. Enase Okonedo, Dean, Lagos Business School. “With its unique voice, presence and networks in the Nigerian business community, LBS is positioned to play a catalytic role in increasing understanding of the business environment and possibilities for broadening the reach of low-cost digital payment systems, particularly in poor and rural areas. Also, LBS is internationally reputed for leading academic and industry-based research and progammes.”
Nigeria is challenged to build the most vibrant and inclusive economy possible. By 2020, the plan is to have 80 percent of Nigerians financially served. Currently, the country stands at 60 percent coverage. There are numerous challenges to overcome if Nigeria is to meet its goal, at least 18 million new users of financial services must be signed on in the next four years.
The project seeks to address this challenge by conducting research, stakeholder forums and sharing research findings which creates access to financial services for the poor, the rural poor in particular.
Access to financial services and knowledge about how to effectively use them makes the burden of poverty much more manageable. Allowing the poor save will also provide the banking industry access to larger depository funds which can reduce credit costs.
“The goal of the project is to better understand how providers can bring digital financial services to Nigeria in a profitable and sustainable way, including studying specific business models, delivery and access constraints,” says Dr. Olayinka David-West, Academic Director, Lagos Business School.
“It also seeks to understand unique barriers Nigeria must overcome to achieve universal financial access and inclusion and also examine the issue of distribution and how to design agent networks that are accessible and responsive to poor people. It is to also employ research findings to support a national dialogue on what policies; if any need to change to enable digital financial services (DFS) providers reach the unbanked poor and achieve Nigeria’s goals of 80% financial inclusion.”
By 2020, Nigeria’s plan is to have 80 percent of its people financially served. Currently, Nigeria stands at 60 percent. In the development of alternative DFS models that serve the poor, the project engages relevant stakeholders (regulators and operators) in the DFS industry in designing and implementing new financially inclusive business models.
The project will investigate what could catalyze and sustain inclusive DFS systems as well as what hinders their progress in Nigeria. It will also employ the evidence-base on the DFS market and its possibilities to unblock regulatory bottlenecks.
Secondly, the project will also develop an understanding of global and inclusive DFS models that show promise of profitability in serving the poor. This aspect of the project will be pursued through a student case competition that explores inclusive business models of DFS providers or institutions supported by sustainable DFS.
Thirdly, the findings will be disseminated by execution of a strategic outreach plan to inform, build support, and promote actionable business models for inclusive digital financial services.
Also speaking at the launch of the project, Kosta Peric, Deputy Director, Bill & Melinda Gates Foundation stated that the Foundation’s collaboration with LBS reflects the vision it has for Nigeria.
He said having an account or financial wallet is the first step for the poor unbanked population as the problem with cash is that you cannot have a history of your transactions.
“Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries, it focuses on improving people’s health and giving them the chance to lift themselves out of hunger and extreme poverty”, he noted. “It seeks to ensure that all people, especially those with the fewest resources have access to the opportunities they need to succeed in life.
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About Lagos Business School:
Lagos Business School is located in Nigeria’s commercial and industrial hub, Lagos. The School was established in 1991, and is committed to teaching management with a humanistic approach, delivering general management education to high potential professionals, across all levels in organizations, in a wide range of industry sectors. A premier business school in Africa’s largest country, LBS is uniquely positioned to develop visionary business leaders capable of maximizing the high growth opportunities in key industry sectors to move Africa to economic prosperity. LBS is the business school of Pan-Atlantic University (formerly Pan-African University).
About the Bill & Melinda Gates Foundation
Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries, it focuses on improving people’s health and giving them the chance to lift themselves out of hunger and extreme poverty. It seeks to ensure that all people—especially those with the fewest resources—have access to the opportunities they need to succeed in school and life. Based in Seattle, Washington, the foundation is led by CEO Sue Desmond-Hellmann and Co-chair William H. Gates Sr., under the direction of Bill and Melinda Gates and Warren Buffett.