By Providence Obuh
Aside from giving grants to support Nigeria’s financial services operators, Enhancing Financial Innovation and Access (EFInA) a development finance company said that it is focused on making the Nigeria financial system work better with a very strong interest in women.
In this interview, Chief Executive Officer of EFInA, Mrs. Chidinma Lawanson, stated, “When we come to our cross cutting things, we are interested in women and Northern Nigeria because the percentage of financially excluded people are mainly in the north east and west
Overview of EFInA
EFInA is a company funded by the UK Government Department for International Development (DFID) and the Bill and Melinda Gates Foundation.
So we are involved in financial inclusion footsteps to ensure that the financial services sector works better especially for the poor and we do this in four areas.
We look at research once every two years, EFInA conducts the EfInA access to financial services survey, we have done this survey since 2008, 2010, 2012, 2014 and we are doing that of 2016.
What we do is go round the entire country, conduct interviews via a research firm asking Nigerians what they think about the financial services system, the survey document is used by regulators like CBN, NDIC NCC and financial services operators to know what Nigerians feel about financial services
We also do innovation funds, we set funds aside to ginger development of product and services by the financial services operators for low income groups. We give them a not refundable grants ranging from any amount to $2 million for a maximum period of two years, to ensure that they develop products that are affordable that can easily be reached and utilised by low income group.
We measure the impact on how many women were affected by that product, how many people in Northern Nigeria bought that product, among others.We also do capacity building where we ensure that financial services operators are properly trained, we identify training programs workshops, conferences that would build their capacities.
We have sponsored financial services operators to travel to different countries and train, they come back and handle their financial services better. In July we trained about 28 micro-finance banks, we brought a facilitator from Kenya to teach them about adopting digital financial services method in rolling out their products, we also do advocacy, liase with regulators such as CBN, NAICOM NDIC to ensure that the regulatory environment that affects financial services is in a positive light.
From the research, where is Nigeria in terms of financial inclusion, especially for the women
If I quote the last one that is available, which is 2014, over 90 million adults in Nigeria, 39.5 percent of them are financially excluded and that represent about 36.9 million of adults, that is a lot and if we compare it to countries like: Rwanda, Tanzania, Kenya, South Africa, in terms of financial exclusion, Nigeria lags last out of that, but on the flip side, if we say the percentage that are banked, we rank better than Rwanda or Tanzania, we rank slightly lower than South Africa in that regards. So there are indices that are good with us and not good in others.
Even the entire country has a strategy, national financial inclusion strategy that we need to reduce financial exclusion to 20 percent by the year 2020, but right now it is 39.5 percent so we have a few years to go to see if we would hit that 20 percent.
Does EFInA has products for women
Yes, it is called cross cutting things, we have strategic areas and cross cutting things, our strategic areas are agent footprint, electronic payment and we look at financial capability as one of our cross cutting things, in going back to strategic areas, we also look at inclusive products which is micro savings, micro loans, micro insurance, non interest banking, also known as islamic banking, those are inclusive products.
When we come to our cross cutting things, we are interested in women and northern Nigeria because the percentage of financially excluded people are mainly in the north east and west from what we found in our research. Financial services providers too must ensure that customers have awareness of their products, you can have the best product and customers don’t understand it.
So you have to do your adverts in languages that they can understand or break your english down to little terms that they can understand, there should be a redress mechanism where they can phone in and get their problem fixed or they can go to their agents and have their problem fixed. That is financial capability, to train your customers to understand your products, to give them awareness of your product. Yes we are very interested in women, but in terms of comparing men and women, more women are financially excluded than the men.
What are the criteria for choosing your beneficiaries
Thank you for that question, the beneficiaries are licenced financial services operators such as deposit money banks, commercial banks, micro-finance banks, the newly licenced super agents, the mobile money operators and micro insurance companies.
They all submit proposals that meet criteria that we set. This year, we are focusing one window on low income women and northern Nigeria, the second window is focusing on small holder agric entrepreneurs and agric producers. So you ensure your proposal is speaking to those windows, whether you are using digital financial method to scale up your product, all the criteria is actually in the forms.
How would you measure EFInA success in Nigeria
We do that through the impact assessment update, if it is the entire EFInA success, like I said before, we have capacity building, we look at impact, how many players within the financial services sector have we trained over a year. In terms of research, regulators, banks, microfinance banks, mobile money operators and micro insurance companies use data from the research, so we track the number of people that use that data and quote that data, that is part of our impact assessment.
We also look at regulation that we have been involved in twigging, that is the advocacy. For the innovation fund, we look at how many grants have been given out and how many customers have been affected by those grants. What we are really looking for is impact assessment.
What are the challenges involved in reaching the unbanked
part of the challenges is access, which is where agents network comes in, there are certain areas even in Lagos that are really underbanked, they travel long distances to see one ATM so it means many of the people there would rather keep their money in places that are outside the financial system because they dont have the time, the type of businesses they do do not give them time to spend like two hours in trekking or traveling over a long distance to get out money. It makes them in quote, financially excluded.
So when we all step in together and say we need to expand agent networks, that is one way of ensuring that the under banked get more banked. That is why the central bank came up with a regulatory framework for licencing super agents whose main focus is just to proliferate agents so that the normal man on the street would look up and say that it is an agent sign.
Because we are in the electronic world, it is faster, better and cheaper to ensure that products and services are seating on some electronic channels because you cannot cover the country just on a one on one manual basis. Someone should seat on his phone and be able to open an account without walking somewhere, then when he has the time, an agent will now near him to do a cash in or cash out, but he should do many transactions on his phone. Product and services from financial services operator that have elements of digital financial services will go along way to reducing financial exclusion.
What is the role of agent banking in financial inclusion
There is still a lot of room which is why I said that CBN saw that need and said we will licence companies whose main work is to be a super agent. An agent is a mini bank on its own, taking banking to the people and not expecting them to walk into a bank where there is a long cue. They are doing the work of the Nigerian tellers we know in a bank just that they are dealing with smaller amount of money.
We don’t expect to walk up to an agent and withdraw a million is not possible, it is for low income people, some just want to pay in that days saving which is N1000, knowing that when they go home with that N1000 they will spend it, it is the same process of having an Ajo or Esusu man coming to pick up their money.
If they know that the agent is nearby and it immediately enters their account, they will know that they are increasing their habit of saving, so with that you are bringing them into the financial services sectors, that is what the agents are out to do. Agents are like tinny mini banks, bringing financial services down to the people, it is branchless banking.
How are you making profit
We are not for profit organisation, we are not here to make profit, the donors give you funding in circles, they can decide to give you X amount of dollar within a five years circle to impact the financial services sector. Our main gain in quote is impact assessment because we are not taking back the money, we are not asking those grantees to return the money because we have donors fund to give out.
What we are making is impact. We were set up to make positive impact in the financial system. Those who are funding us like the DFID of the UK government and the Bill and Melinda Gates Foundation are not making money out of Nigeria, this is their contribution to the financial sector in Nigeria. They have contribution in other sector as well. EFInA is a development finance company that is focused on making the Nigeria financial system work better. The banks that we give fund also match the fund.
What is EFInA’s next plan in furthering financial inclusion
The four areas I have said, then each year, innovation fund proposal keep increasing, meaning there are more financial services operators that sees the need to go down to the low income sector, previously, many of them were focused on large corporate organisation but with the fall in price of oil, many companies are focusing on retail, knowing that, that is the critical mass in Nigeria.
A significant number of the adult population are in those low income group but they are very few companies that are in the corporate world. We are engaging with financial services operators who see the need to go down to low income group, we are engaging with them as EFInA to expand that discussion that we must ensure that reasonable number of financially excluded people in Nigeria get included, it increases our GDP and helps the life of those included because they now have a savings culture.
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