Uche Uzoebo is the Head, Agency & Merchant Services, and Financial Inclusion at Diamond Bank. In this interview with BusinessDay’s Endurance Okafor, she shares insight on how the payment service banks are going help achieve the Central Bank of Nigeria’s 80% inclusion target, the challenges and projections for the country’s inclusion rate. Excerpts:
Tell us about yourself and what you have done in the financial inclusion space.
My name is Uche; a mother, a wife who made a switch from studying Microbiology in school to working in the financial sector.
My career in the banking industry started over 15 years ago, where I have been a problem solver in the financial services industry spanning across sales and marketing, personal banking, commercial banking, Corporate banking and then to Product Management, payments and collections, acquiring business and E-banking.
I currently focus on developing structures, strategic partnerships and providing solutions that grant, improve/expand access to financial services to micro, small and medium enterprises and the under-banked which has brought millions of previously excluded individuals into the financial system.
Nigeria’s bank-led financial inclusion model seems not to be driving the country’s inclusion rate as much as expected. What do you think has been the problem?
One key issue would be banks having the passion and vision to drive financial inclusion aside the efforts of the central bank. Initially banks were only focusing on core banking and they were not addressing the grassroots because when you talk about financial inclusion, you are referring to the set of people who do not have any form of financial facilities around them- the unbanked, the un-served and underserved.
The objective of having the financial inclusion strategy is to get these underserved and excluded into the financial cycle.
But the strategy for banks was a bit different initially. However in 2012, Diamond bank started driving financial inclusion through its retail banking, which was not just because of the regulatory but because we saw that the huge potential yet to be tapped in that space.
Now that CBN has decided to give PSB licence to Telcos and other businesses to operate in the financial space, how do you see this driving financial inclusion?
For me it is a good idea because we really need to walk the talk. With that the PSBs will complement what the banks are doing in driving inclusion rate because the truth is that the banks cannot drive financial inclusion alone so with the Telcos coming on board, we will be able to reach even the last mile and offer these financial services to them.
So, I think it is a great idea. Should the banks be scared? No because the Telcos are complimenting the banks.
Like in Kenya, the mobile money company, Safaricom is bigger than some banks in the country; will this be the same in Nigeria?
Well, not necessarily, as I see the telcos complementing the banks in driving Financial Inclusion.
What are the likely problems PSB may have in Nigeria?
Limited access to mobile technology- Accessibility to internet and network technology in rural areas is limited.
lliteracy- Alarge population of rural dwellers are illiterate and may not want to take advantage of the PSB scheme.
High capital requirement – The high capital income for PSB is N5 billion to establish and operate a PSB, this appears prohibitive as there are other cheaper financial inclusion initiatives already on ground for financial inclusion that investors find more attractive.
You said PSBs will complement the banks, in what specific areas do you see them collaborating?
For the collaboration, let me make reference to Diamond Bank partnership with MTN. We collaborated with them to roll out Diamond Y’hello account, which is a real bank account with about 11.2million customers. So we were able to on-board people in the remote areas, the underserved, and people that ordinarily do not have bank accounts were able to own one without having to visit a physical bank.
This was made possible with just their MTN line and dialling *710# they can open a real bank account. That was how we were able to achieve it in some communities, local government areas and in the rural areas, because those locations are where you have a huge percentage of the excluded.
So, this collaboration gave us mileage in the financial inclusion space to be able to give life to those that ordinarily did not know that they will be able to achieve much. We were able to include them, as they were able to save, buy airtime and carry out transfers.
Financial inclusion analysts have said that Nigeria is peculiar and as such needs a special model. They also claim that the Telco-led financial inclusion model may not be the best way for the country. What is your take on this?
Bangladesh has a bank-led model of financial inclusion, Kenya has Telco-led; Brazil has a combination of both bank and telco. I see Nigeria having a combination of the banks and telcos. The truth is that the Nigerian government and the government of other countries are not the same, so we don’t also have the same basis for judgment.
Most times when we want to talk about financial inclusion, we would want to compare Kenya and Nigeria. I wouldn’t make such a comparison because there are lots of strategies in Kenya that they have gotten right that we are yet to achieve; when we talk about security in Nigeria it is not the same in Kenya. When you go to that country you will see people in the remote areas carrying out transactions through mobile money and several agents are championing those transactions, but in Nigeria, there are some locations you cannot get to because of security challenges.
But can we get to the level where Kenya is? Yes. Will it just be only Telco-led? Maybe not; it is going to be a combination of both banks and Telcos.
Do you see the 80% inclusion target achievable by 2020?
It is possible because, with the introduction of Shared Agent Network Expansion Facilities (SANEF) which is working with the super agents to build the agent network to 500,000 by the year 2020, I believe we will achieve the target and have more people financially included, and these 500,000 agents will be responsible for including and rendering services to the grass roots.
The good thing is that most bank CEOs are in support of SANEF initiative and they would want it to succeed.