Telecoms holds greatest promise for financial inclusion in Nigeria

Telecommunications remains the best enabler in expanding the frontiers of financial inclusion in Nigeria, the Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC), Umar Danbatta, has said

According to the NCC on its official Twitter page, Mr Danbatta said this while receiving a team from the Bill and Melinda Gates Foundation (BMGF) and the foundation’s consultants, Glenbrooks Partners, who paid a visit to the commission.

“The realisation of the centrality of telecommunication to all aspects of the economy explains NCC’s upbeat in identifying access gaps and in instituting processes for the expansion of telecom infrastructure across the country,” he said

Mr Danbatta said the infrastructure companies (Infracos) have been licensed by the commission to connect fibre from landing ports to the hinterland of Nigeria, especially the 774 local government areas in Nigeria.

He believes the federal government will take a concrete position soon to enable the Infracos to commence operations because “fibre is the real solution to the volume of transactions in the financial services sector.”

No access to telecommunications

Mr Danbatta said that 35 million Nigerians have no access to telecommunications services and by implication, they lack access to digital financial services, a condition that undermines financial inclusion.

He said this challenge is caused by inadequacy of both wireless and fibre connectivity infrastructure.

“We need to do more investment in both fixed and wireless infrastructure to enable us to reach our target of at least 80 percent level of financial inclusion in about four years,” he said.

He said access to telecom services by distant, isolated, unserved and underserved communities will enable more citizens to embrace a digital financial culture.

Mr Danbatta said the Central Bank of Nigeria (CBN) has issued Mobile Money Payment Services license to some mobile network operators to enable them to undertake mobile financial transaction services.

He advocated renewed greater cooperation and collaboration between the banking and telecommunications sectors to harmonise the cost of transactions for financial services in an equitable manner.

A delegate of Bill and Melinda Gates Foundation, Abiodun Jagun,informed Mr Danbatta that the foundation requested for the meeting in other to deepen the extant the partnership between the foundation and the Federal Government of Nigeria to increase citizens’ access to financial resources.

Ms Jagun said the discussion with the commission is so important because it regulates the telecom sector.

She said understanding the strides made by the commission, as well as the challenges it faces, will help the foundation to know the nature of collaboration and support to offer without distorting or disrupting the market.

Ms Jagun said the beauty of the visit and the discussions are meant to ensure that the philanthropic opportunities offered by BMGF are supportive and complementary to the digital ecosystem.

Financial Inclusion in Nigeria

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.

To attain this, the Central Bank of Nigeria (CBN) adopted the National Financial Inclusion Strategy (NFIS) in 2012.

According to the strategy’s document, the NFIS was built on four strategic areas of agency banking, mobile banking/mobile payments, linkage models and client empowerment.

It also identified four priority areas for guideline and framework development. They include Tiered Know-your-Customer (T-KYC) Regulations, Agent Banking Regulations, National Financial Literacy Strategy, and Consumer Protection.

In its five-year strategy (2019-2024) plan, the Central Bank governor, Godwin Emefiele, said the apex bank’s ultimate goal is to ensure that a 95 per cent financial inclusion rate is achieved by 2024.