Promoting Financial Inclusion with e-Payment

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Globally, financial inclusion generally refers to people being able to get access to the formal financial institutions. Individuals are classified as financially included when they have or use a financial product or service.
In Nigeria, as part of efforts to address the problem of low level of financial inclusion, the Central Bank of Nigeria last year inaugurated a National Financial Inclusion Strategy aimed to increase the number of Nigerians that are included in the formal financial sector to 70 per cent by the year 2020.
Therefore, experts in the e-payment industry have stressed the need to adopt financial inclusion as a strategy for driving growth and profitability.
This was the consensus of the experts at the 3rd annual conference of Committee of E-Banking Industry Heads (CeBIH) held in Uyo, Akwa Ibom state recently.
The conference focused on the need to maintain the impressive growth recorded by electronic payment courtesy of the cashless policy of the Central Bank of Nigeria (CBN).
The conference was tagged: “E-payment Systems: Harnessing Opportunities for Growth and Profitability.”
According to the participants, the theme was in line with realities of today as banks in Nigeria seek for ways to grow the use of electronic channels.
The Chairman, CeBIH, Mr. Chuks Iku explained that the goal of the association is to promote adoption and usage of electronic channels in ways that would bring about financial inclusion of the un-banked and under-banked.
Also, the Executive Director, Nigeria Inter-Bank Settlement System (NIBSS) Plc, Christabel Onyejekwe, said: “Are there opportunities for growth? Yes. Are we harnessing these opportunities for growth.”
In his keynote address, Onyejekwe pointed out the huge number of people outside the financial system as one of the opportunities that needed to be harnessed for growth.
She disclosed that only 28 per cent of registered Point of Sale (PoS) machines were active.
“This is a meagre 31, 000 active PoS out of the 158,000 out there, yet we have not even gone cashless across Nigeria. Less than 20 per cent of rural Nigerians have been reached by the mobile money operators (MMOs) and more than 45 per cent of Nigerians are yet to be banked.
“These are veritable sources of growth and development for us as a whole and we believe that the PoS business can be improved more, mobile payment we can deepen more and revitalised, and our drive for financial inclusion must be re-energised,” she added.
Also speaking on “Driving e-Payment and Financial Inclusion through Branchless Banking,” payment specialists with the World Bank, Robin Hofmeister, identified branchless banking as an effective tool of reaching millions of the under-banked and unbanked with electronic payment channels.
Hofmeister defined branchless banking as the delivery of financial services outside conventional bank branches using information and communications technologies and retail agents.
He also stressed the importance of mobile phones as one of the most effective means of delivering e-payment to the unbanked.
In addition, he pointed out the fact that 79 million Nigerians had access to mobile phones compared to 27 million banked Nigerians, arguing that with the right mobile money framework, mobile phones could be used to deliver banking services to more people.
On his part, the Founding Director, PEP Intermedius, Kenya, Frederik Eijkman disclosed that his firm started as a small microfinance institution in 2004, but today has become a financial supermarket which acts for multiple money transfer services, bill-pay partners, international remittance services, lottery agencies, government payment services amongst others.
“The result is that PEP currently offers a broad spectrum of payment services, making it the ideal transaction destination for both private as business customers”, he added.
According to him, his company achieved the feat through agency banking based on the developmental needs of the under-banked.
To successful operate agency banking,  Eijkman said there was need for a super agent, that would manage other agents, while sound business proposition must be made to the agents.
He said most importantly, banks must use existing retail infrastructures to deliver trust through technology, and use existing deployed technology.
His opinion was corroborated by the Chief Executive Officer, Mobikash, Kenya, Duncan Otienno who noted that: “Agency banking cannot work if the banks are far from the people.
“Nigeria is still far behind with agency banking. Giving the country’s population, Nigeria needs about 200,000 agents, and they have to collaborate to break even.”
But Emenike Eleonu of the CBN also pointed out that there was also the challenge of awareness about electronic payment.
According to Eleonu, who represented the Director of Banking and Payment System, CBN, lack of awareness was the biggest challenge to the cashless policy.
In his address, Governor Godswill Akpabio who was represented by the Deputy Governor, Lady Valerie Ebe, noted that despite the huge advantages offered by e-payment, Nigeria was yet to explore the full benefits of the technological advancement in the banking industry.
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