LBS, Gates Foundation embark on new research initiative for 80% financial inclusion

Nigeria’s target of having its 80 percent of adult population financially served by 2020 seems realistic with the new research project by Lagos Business School (LBS) supported by Bill & Melinda Gates Foundation.

The research project titled “Sustainable Business Models for Delivering Digital Financial Services to Lower Income Unbanked Citizens of Nigeria,” aims to address the regulatory gaps and market structures disabling financial inclusion for poor unbanked Nigerians.

The project seeks, among others, to better understand how providers can bring digital financial services to Nigeria in a profitable and sustainable way, including studying specific business models, delivery and access constraints.

According to a geographic information system (GIS) mapping estimates, there are approximately 35,000 financial access points in Nigeria, serving an adult population of more than 93 million (one for every 2,500 adults).

In Kenya, there are 80,000 total financial access points serving an adult population of 26 million (one access point for every 325 adults).
Enase Okonedo, dean, LBS, sees financial inclusion as a catalyst for economic growth and wealth creation.

But she was concerned that a number of factors have constrained financial inclusion in Nigeria. While addressing journalists in Lagos, she mentioned such constraints to include regulatory, institutional and cultural barriers, which she believes Nigeria must overcome to achieve universal financial access and inclusion.

According to Kosta Peric, financial service for the poor program deputy director, Bill and Melinda Gates Foundation, one of the more promising ways to deliver financial services to the poor, profitably and at scale is by using digital payment platforms and digital financial services.

“We are focusing on digital financial services. It is not about charity but helping establish business model to provide financial services to the poor,” he said in Lagos.
Peric explained that using research and data in connection to financial system help the poor get out of poverty.

Olayinka David-West, academic director, LBS, said the project will investigate what could catalyze and sustain inclusive digital financial services system as well as what hinders their progress in Nigeria.
It will also employ the evidence-base on the digital financial services market and its possibilities to unblock regulatory bottlenecks.
The project she said will also develop an understanding of global and inclusive DFS models that show promise of profitability in serving the poor. More so, David-West added that this aspect of the project would be pursued through a student case competition that explores inclusive business models of DFS providers or institutions supported by sustainable DFS.