Nigeria’s economic potential is clear, full of entrepreneurial spirit and untapped talent. Yet, a significant 26 percent of Nigerian adults, representing an untapped market of 28.8 million potential customers, are excluded from financial services. This exclusion hinders economic growth, especially in critical sectors like agriculture and micro-retail. Millions of potential entrepreneurs and consumers are locked out, impeding business growth and innovation across the country, continuing poverty, and limiting individual ambition. As business leaders, we have a moral and strategic imperative to champion financial inclusion for all Nigerians.
Q: “As business leaders, we have a moral and strategic imperative to champion financial inclusion for all Nigerians.”
My experience in different areas of business, from getting funding for healthcare to leading strategic partnerships, has given me a strong grasp of the Nigerian business environment. In my role at Guaranty Trust Bank, leading the charge on some financial inclusion initiatives to expand access, I saw for myself the opportunities hidden within our communities simply because people cannot get basic banking tools and services. Just imagine the growth potential for businesses like micro-retailers if millions of new customers gained access to credit and savings options. They could expand their inventory, improve their shops, and cater to a wider customer base.
Read also: Nigeria closer to 2024 financial inclusion target but gaps persist
The ripple effect
Financial inclusion goes beyond opening bank accounts. It is about helping individuals and small businesses get the tools they need to manage their money, save for the future, get loans to grow, and take an active part in the economy. This creates a ripple effect. When more people can save their money, it creates a pool of funds that can be used to invest billions back into the economy each year. This leads to more business growth because companies can get loans to expand. Everyone benefits from a strong economy, especially when people have more control over their finances.
Studies by the McKinsey Global Institute, a respected international research group, in their 2016 report titled “Digital finance for all: Powering inclusive growth in emerging economies,” suggest that bringing financial services to all Nigerians could significantly boost the country’s GDP, potentially unlocking billions of dollars in new economic activity every year. The report highlights how financial inclusion can fuel economic growth in developing countries by encouraging more investment, business creation, and consumer spending. This growth wouldn’t be limited to headline figures; it could create millions of new jobs, particularly at the micro and small business level. Estimates by various development organisations suggest that financial inclusion can lead to significant job creation in emerging economies.
Picture the impact on our agricultural sector. Access to microloans can significantly improve agricultural productivity for farmers in developing countries. This allows them to invest in better seeds, fertilisers, and irrigation, leading to higher yields and increased income. Financial inclusion could also lead to a lot of new inventions and jobs across different industries, especially tech. We could see an explosion of new tech startups, creating millions of new jobs in areas like software development and online shopping by making it easier for people with business ideas to get the money they need.
Strategies for inclusive finance
Getting everyone access to financial services requires doing several things at once. Technology makes a big difference, with mobile money apps and electronic wallets reaching people in remote areas who never had bank accounts before. These mobile money apps have really changed how people access money in Nigeria, reaching millions in areas that previously had no banking options. Official numbers show a massive jump in mobile transactions, with the number of transactions through phones going up by 128 percent in the first few months of 2022 compared to the same time in 2021. Imagine if we could create similar solutions specifically designed for farmers or small shopkeepers, making it even easier for them to get the financial services they need.
Financial literacy is equally crucial. Collaboration between governments, financial institutions, and NGOs can enable individuals through local programs. They can navigate the financial system, make sound decisions, and build a secure future equipped with financial knowledge and skills, becoming active participants in the economy.
Product innovation is also key. Financial institutions must design services specifically tailored to the underbanked population. This could include microloans, microinsurance, and simplified savings accounts with minimal requirements for entry.
Public-private partnerships are crucially important to unlocking immense potential. Suppose the government partnered with a mobile network operator to extend financial services through mobile phones in remote areas. Kenya’s M-Pesa, a revolutionary mobile money transfer service, is a prime example. We can significantly accelerate financial inclusion in the country by learning from such successes and adapting them to the Nigerian context.
Building a more prosperous future
We can empower Nigeria’s unbanked population to reach their immense potential by embracing these strategies. As business leaders, we have a responsibility to champion financial inclusion through innovative solutions, strategic partnerships, and a commitment to financial literacy. Doing so not only strengthens our communities and fuels economic growth, but also creates a more prosperous and inclusive future for all Nigerians.
Ota Akhigbe is a results-oriented leader with over 15 years of experience driving impactful change across diverse sectors. She is a passionate advocate for financial inclusion and economic development in Africa.
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