It’s another busy day at Murtala Muhammed Local Airport 2, and there is a small queue at the GTB ATM. The young lady has been trying to get some money out of the ATM for the past 5 minutes, and it appears we have yet another “network issue” situation.
How am I supposed to pay for parking? The security guard sidles up to her, and a conversation in hushed tones ensues. She reaches into her purse slung over her shoulder and pulls out an envelope and passes it over.
He pulls out the security sheet with her ATM card pin and enters the number. He then shows her how to change the pin to one of her liking. She walks away smiling, mission accomplished. He saunters away – another day in the office.
The Central Bank of Nigeria (CBN), in collaboration with other stakeholders in October of 2012, launched the National Financial Inclusion Strategy, with the express goal of reducing the number of adults excluded from financial services from 43 percent in 2010 to 20 percent by 2020.
The CBN recently stated that it was “working assiduously” to achieve a target of 95 percent financial inclusion by 2024! There have been many milestones celebrated and impressive numbers touted but what does financial inclusion really mean, beyond USSD and agency banking?
While the CBN may have had well-intentioned and very lofty goals around getting financial services into the hands of the majority of Nigerian adults, unfortunately, the pronouncements and directives given to the banks and other financial institutions somewhat underestimated the impact of literacy in the achievement of the said goals.
While we may argue about the numbers of adult Nigerians who are currently financially excluded, we should not argue about the number of Nigerians who are doing anything beyond the basic financial transaction of exchanging cash for goods.
Cash remains king in the country of 210 million individuals, and the gateway to financial services remains the agency banker and USSD for most Nigerians who have managed to open bank accounts.
According to the World Bank, financial inclusion means that individuals and businesses have access to useful and affordable financial products that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.
Sadly, the picture of our lady struggling at the ATM and the majority of the banked who do not have access to savings, credit or insurance products suggests that we may still be a ways off truly achieving a significant level of financial inclusion in Nigeria.
But why? We have the biggest penetration of mobile phones on the African continent. Yes, we do, but we also have a largely uneducated populace. The majority of adults in Nigeria do not start using technology in any significant form, not to speak of understanding finance, until they become adults, i.e. 18 and above.
Most state schools have curricula, which are ossified and stuck somewhere in the 60s. Children are not growing up with technology as a part of their everyday lives, and the barriers to accessing technology grows steeper as inflation and devaluation continue to wreak havoc on the spending power of the lower-income class.
Our young lady has not been exposed to learning and adopting technology at an early age through gamification and the embedding of technology and finance into every single level of the education system.
For the financial inclusion strategy to reach its goals, the literacy gap must be bridged, and this can only be done in partnership with the education sector. Policy and infrastructure, especially in state-run schools from nursery to tertiary level must be completely revamped.
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Technology must become an intrinsic part of the teaching and learning process and access to technology at all levels must be democratised to create a level playing field where individuals from all backgrounds will truly be able to gain access to the financial products that meet their needs. Young people graduating from primary schools must be able to read and write properly, and high school graduates must have the basics of accounting and finance already engrained.
Financial institutions also have a huge role to play by making financial services more accessible. While the telecommunications companies have done a good job of extending coverage of their networks to most significant corners of the country, this has not been matched by innovations in the financial institution space — few channels have been localised, even USSD is still only in English, and most applications still have complicated interfaces and require lots of bandwidth to work.
No data required to access rich apps must become the norm. We may announce that 95 percent achievement of financial inclusion goal for 2024 but until we close the literacy gap, we are only scratching the surface in unlocking the potential that is inherent in attaining strong financial inclusion goals.
Mordi is a former chief operating officer of Carbon and immediate past head of digital lending at Access Bank. Twitter: @epmordi
