Following the ‘new normal’ of contactless payment and the boost in online transactions amid the outbreak of COVID-19, BusinessDay, West Africa’s leading business news and intelligence provider, is organising a virtual discourse on Nigeria’s financial inclusion and digitalisation for post-COVID-19 recovery.
Tagged ‘Future of Payment and Financial Inclusion: Financial Inclusion and Economic Digitalisation for Accelerated Recovery Post-COVID-19’, the one-day digital dialogue scheduled for Thursday will host leaders in the private and public sectors to make sense of the country’s financial industry in response to the current realities and provide clear directions on the way forward post-pandemic.
While Nigeria has made progress in digital financial services and financial inclusion at 63.2 percent as of 2018, the country with the most population in Africa still has a financial services industry that is faced with infrastructure and policy challenges.
The recently introduced digital products by commercial banks were not sufficient to serve Nigerians during the five-week COVID-19 lockdown in Lagos, Ogun and the FCT, as long queues were reported at several banking halls and ATM stands.
According to industry analysts, the outbreak of coronavirus reveals that while Nigeria has made progress in on-boarding more of its population into the formal financial industry, access and usage to digital financial services is still low.
With a financial exclusion rate of 36.8 percent, Nigeria’s unbanked population estimated at 45 million, adult population without any formal access to financial services (including loans or start-up capital), operating almost exclusively with cash, represents a significant untapped opportunity both to boost the country’s declining GDP and to drive progress towards the country’s development goals.
At the current financial inclusion level, the Central Bank of Nigeria (CBN) is 16.8 percentage points away from its 2020 exclusion target of 20 percent.
Conversations at the digital dialogue will be led by luminaries such as Musa Jimoh, director, Payments System Management, CBN, the keynote speaker; Ebehijie Momoh, senior vice president, general manager, West Africa, Mastercard; Elsa Muzzolini, General Manager, Commercial, Mobile Financial Services, MTN Nigeria; Jacqueline Jumah, head, Digital Financial Services at EFInA; Esigie Aguele, CEO /co-founder, VerifyMe Nigeria; Niyi Toluwalope, CEO, e-Tranzact International plc; Meghan Curran, West Africa director, Acumen; and Emeka Mordi, COO, Carbon.
Like other financial inclusion conferences that have been organised by BusinessDay, this year’s edition, though virtual, has two-panel sessions that will be addressing issues on how stakeholders in Nigeria’s financial industry will collaborate for broader financial inclusion boost while exploring the opportunities in the digital financial services.
According to industry analysts, the importance of digital financial services for a country like Nigeria which runs a cash-based economy cannot be overemphasised, especially at this time when online transactions have become the order of the day.
Before the pandemic, a survey by BusinessDay revealed that Nigerian businesses operating in the country’s formal economy had recorded growth with the emergence of new digitally-driven business models, particularly in financial services, e-commerce and logistics sectors, to mention a few.
Industry analysts believe that, to a large extent, the growth in digitalisation helped to equip businesses to adjust during the lockdown in Lagos, Nigeria’s commercial hub, Ogun and FCT.
However, the large informal sector in Africa’s largest economy was more adversely impacted economically due to the inability of SMEs and individuals, who are outside the formal financial sector, to conduct transactions on digital platforms.
According to the World Bank, SMEs play a huge role in facilitating economic development due to their flexibility and affinity to development, even more so in emerging economies with a high contribution from the informal sector.
Estimated at 37 million, Nigerian SMEs were said to have a finance gap of $158.13 billion (2017 SMEs report by the World Bank and Finance Forum). Their inability to access to formal financial services remain a threat to growth as poor credit history hinders chances of small businesses to access loans for expansion.
