In its quest to spur financial inclusion, Nigeria’s premier and leading financial institution, First Bank of Nigeria said it’s in talk with a telecommunication company for collaboration as industry players await the Central Bank of Nigeria (CBN) for the mobile money licence.
According to Adesola Adeduntan, Managing Director/chief Executive Officer, First Bank of Nigeria Ltd., the tier-one bank sees opportunity for collaboration.
“As we speak there are ongoing conversations for collaboration and that is going to be the models this institution will pursue,” Adeduntan told Businessday at the lender’s head office in Lagos.
On the 5th of October 2018, the central bank released exposure draft guideline in which it proposed Payment Service Banks (PSB) aimed at deepening access to financial products and services in a country that is lagging its African peers in inclusion rate.
According to the apex bank, subsidiaries of mobile network operators (Telcos), mobile money operators, retail chains (supermarkets) and banking agents are welcome to apply for the PSB license, provided they can meet certain requirements of the CBN.
“But we are fully equipped to also compete,” Adeduntan said adding that “there is enough space” to accommodate everyone.
In January 2019, the central bank unveiled a revised version of the National Financial Inclusion Strategy (NFIS) in which the lender said it is optimistic about achieving the set 80 percent inclusion target of 2020.
Nigeria currently has 36.8 percent of its adult population excluded from the financial cycle; this translates to a population of 36.6 million adult Nigerians, who at the moment are not included in the financial net.
Less than 5 months to the 20 percent exclusion deadline, the regulator has about 16.8 percent gap to close if it is going to achieve its target.
Nigeria’s bank-led financial inclusion model has been argued by industry players as one of the reasons for the lag in the country’s inclusion rate.
No wonder the proposed PSB has been seen as a welcomed development considering it will avail other businesses, especially the Telcos opportunity to partake in providing financial services.
At least 30 business names have since applied for registration to obtain the payment service bank licence but it’s been almost one and the regulator is yet to give license to any of the applicants.
“The space left is so huge and if the country as a whole is to achieve those objectives, it would need a number of other players, and given what we have done, we believe we are the institution to beat in that space,” Adeduntan said.
According to the MD, the commercial bank has the highest banking agent network in Nigeria with about 31, 000 agents operating with the name- Firstmonie.
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