There is no denying that poor and underprivileged individuals in Nigeria have access constraints to the country’s financial systems. In response to this, Lagos Business School (LBS), hosted a Digital Financial Conference, tagged “Digital Financial Services: Market and Industry Overview”, today, December 7, 2016 at the School premises.
This conference was part of a research project, supported by the Bill and Melinda Gates Foundation, titled “Sustainable Business Models for Delivering Digital Financial Services to Lower Income Unbanked Citizens of Nigeria“. This was facilitated in order to have a better understanding, of the delivery and access constraints the poor face in relation to the financial system, and also to proffer appropriate business models to enhance access and financial inclusion through Digital Financial Services.
Dr Enase Okonedo, Dean, LBS, in her welcome address said that the conference aimed to look into the ways in which financial inclusion can be strengthened for the low income earners in the society. “The objective is to look at how we can deepen financial inclusion, especially for the lower income group and the unbanked Nigerians” she said.
Dr Okonedo also stated that the purpose of the conference was to explore the ways in which Nigeria, will achieve its goal of 80% financial inclusion by year 2020. “According to a 2014 report we are currently at 60% of the financial inclusion for Nigeria, and we have a target of 80% by 2020. We want to continue the discussion of how we are going to achieve our target by 2020” she added.
Kosta Peric, Deputy Director, Financial Services for the Poor, Bill and Melinda Gates Foundation, in his opening remarks highlighted the fact that in order for Nigeria to reach its 2020 goal of 80% financial inclusion, there needs to be a significant contribution from the government and financial service providers. “In Nigeria, there are 14 million people who are financially excluded, all hands need to be on deck; the Federal Government, Central Bank of Nigeria, banks, mobile money affiliates and all financial providers need to be proactive if we want to achieve the 2020 goal” he said.
Peric also pointed out the need for digital payment platforms in order to ensure financial inclusion. “If we want to achieve financial inclusion, certain things need to be put in place. We need to have a digital payment platform that allows everyone to transact in real time” he added.
Dr Susan Lund, Partner, McKinsey and Company, Leader McKinsey Global Institute, in her keynote address, also emphasised the importance of the adoption of Digital Financial Services, in order to promote financial inclusion and economic growth. “Using digital technology instead of cash, dramatically lowers the cost for financial service providers. The ultimate goal for Digital Financial Services is to improve the quality of people’s lives; digital finance benefits everyone and creates economic growth” she said.
Enlightening the audience on the state of the Nigerian market, Dr Olayinka David-West, Faculty, Lagos Business School, stated that the under banked or financially excluded are low income earners who earn less than $2.50 a day, married and unmarried women below the age of 35 years old, and also people who reside in rural communities.
Dr David-West also pointed out the various factors that limit financial inclusion in Nigeria “Certain factors affect financial inclusion across the spectrum of financial services. Such as; awareness, socio-economic status like the lack of employment, monetary and non-monetary cost, and product fit” she said.
The conference came to an end with a case exhibition of Digital Financial Service initiatives, which have been deployed across the world, primarily focusing on emerging markets.