By Oluwatosin Sam-Amoye
The EFInA 2018 survey revealed that several factors were responsible for the unbanked population being financially excluded. These factors include:
- Unbanked population not aware of what products and services are available
- Unbanked population do not know the benefits of financial products and services
- Low literacy level
- Lack of trust of the services
- Non availability of bank presence in their locality
- Negative view of banks as being overly ‘complex’
Agent Banking is a veritable tool in tackling the issues identified as inhibitors to deepening financial inclusion. Agent banking involves contracting established businesses to offer financial services to the banked, under-banked and unbanked population on behalf of a financial institution. These financial services include; opening of tier-1 savings accounts, fund transfers, deposits, savings, cash withdrawals, bill payments, airtime top-up and much more.
Agents will be able to offer financial services to the largely unbanked people who reside in rural areas thus meeting their need to open bank accounts, save money and earn interest on savings, whilst agents earn commissions from the services they provide.
Ideal Businesses for Agents Banking
Examples of businesses that are viable for agent banking include: local supermarkets/ convenience stores, pharmacies, petrol stations, popular local restaurants, hair salons, etc.
Benefits to Agents:
- Increase foot traffic/demand for their existing businesses
- Avenue for additional income
- Business growth
- Access to business support (credits)
- Brand association with financial institution
Benefits to the financially excluded:
- Convenient access to financial services
- Reduced travel time
- Familiar relationships (with Agents serving them)
- Becoming knowledgeable of the benefits of financial products and services
The Fintech companies are not left out. They have been providing cutting edge platforms to enable businesses render basic financial services to the unbanked and under banked population in Nigeria.
A lot has been put in place by the CBN ensure that the number of financial excluded population in Nigeria increases to 80% by 2020 and 95% by 2024.
Such measures includes the introduction of the Shared Agent Network Expansion Facilities, licensing of Payments Services Banks and the use of POS terminals for withdrawals.
It is believed that these measures will ultimately solve financial Inclusion challenge in Nigeria.
Oluwatosin Sam-Amoye
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