The need to achieve financial inclusion for the over 80 million unbanked Nigerians has seen a number of registered merchants, in several areas of Lagos, offering easy financial access to those without bank accounts , writes DAYO OKETOLA

The huge gap between people who have access to banking facilities and the unbanked in the country has been a major issue among stakeholders in the financial sector.

It is also one of the motives behind the continuous call for financial inclusion for the over 80 million unbanked people in the country.

Extending banking services to the unbanked Nigerians, according to experts, is essential in the face of unimpressive industry statistics.

Available industry figure shows that market penetration for banking services in the country is merely 17 per cent with less than 22 million existing bank accounts.

Of course, statistics have shown that over 80 per cent of Nigerians are currently unbanked; meaning that an estimated over 87 million individuals, have limited or no access to financial services in Nigeria.

The Central Bank of Nigeria, which has been in the forefront of serving the people without access to formal financial services, has been promoting two payment systems to actualise financial inclusion for the unbanked in the country.

One of the payment systems – card-based branchless banking- includes the use of payment cards for financial services such as bill payment, toll collections and top-up through the Point of Sales terminal.

Cardholders need not have bank accounts under such system, as they can load value into their cards through PoS terminals located in different parts of the country via agents’ networks.

They can also withdraw cash from the agents, who in turn deduct value from their cards.

The General Manager, 3Line Card Management, the only company licensed by the CBN to roll out branchless banking services, Mrs. Funke Ade-Ojo, said the unbanked segment of the economy would be reached with PoS devices to provide access to financial services.

The other payment system being positioned for servicing the unbanked community in Nigeria is mobile money, which transfers monetary value via mobile phones.

In view of this, the CBN had given ‘approval in principle’ to I6 companies to operate mobile money networks across the country.

The 16 mobile money operators had also been given a period of four months, which lapsed at the end of March, 2011, to prove that they had capacity for mobile operations. Failure to do this may mean revocation of some licences by the CBN.

Experts argued that providing banking facilities for the unbanked people in Nigeria was essential, especially as it was increasingly becoming not cost effective for banks to build more branches across the country.

While the 16 mobile operators are yet to roll out their mobile money networks, the only card-based branchless banking service provider had commenced operations and neighbourhood stores are already making banking possible for the unbanked across Lagos State.

Propelled by the need to provide financial services for the unbanked community, 3Line Card Management, said it had signed over 1,000 residents in Lekki, Ajah, and Epe areas of Lagos on its street banking services.

The 3Line Card Management boss informed that an initiative known as the Freedom Network had been inaugurated to deepen access to financial services amid the unbanked.

She explained that there were several services on the Freedom Network, which offered instant light banking services to the users through appointed neighbourhood service providers and merchants.

These services, according to her, include cash withdrawal, money transfer, airtime top ups, ticketing, pay-as-you-go vehicle insurance and utility bill payment at various registered merchant shops.

Ade-Ojo explained that residents of the Marina-Epe neighbourhood would be served by over 25 Freedom Network merchants spread between Total Petrol station in Aiyetoro, Epe, Ikota Shopping Complex, and Muri

Okunola, Kingsway road and Adeniji Adele/Sura Market areas of Lagos, among others.

The residents of the neighbourhoods, according to Ade-Ojo, have taken advantage of the proximity and availability of the merchants and will benefit from the array of services on the network.

While educating the residents about the various services available on the network and how they could benefit from such, as well as highlighting the locations of the merchants in the neighbourhoods, the Strategic Marketing Officer, 3Line Card Management, Mr. Muyiwa Oyefeso, explained that the residents on the Freedom Network were issued Freedom Cards which allowed them to engage in different transactions on the network, such as fund transfer, saving/deposit, cash withdrawal and purchases.

“On the other hand, the Freedom card allows users to withdraw cash at mostly ATM locations and purchases at merchant outlets,” he said.

The Freedom Card, according to Oyefeso, has dynamic data authentication technology as against the static data authentication technology used by many other cards.

Oyefeso, said while the SDA cards could be cloned, it was difficult to clone the DDA cards because its cryptographic keys were generated for different transactions.

He said, “With this capability, Freedom cardholders have the opportunity to transact business in an unreliable telecommunications environment, as is the case in Nigeria.”

Speaking with our correspondent during the community inauguration, the residents expressed joy at being able to send and receive money instantly in their neighbourhood stores without visiting the banking hall.

One of the residents, Mr. Ishau Olukorede, a civil servant from Epe, said he joined the network because of the bouquet of services such as money transfer and cash withdrawal available on it.

He said, “I joined the Freedom Network because of the money transfer value. I regularly send money to my son in the university in Ago Iwoye.”

He added that the network had enabled him to fulfill his obligations to his son without leaving his neighbourhood.

In similar vein, a food canteen operator from Ajah area of Lagos, Mrs. Aminat Ayo, said what attracted her was the ability to use the Freedom Card as a wallet, adding that it was convenient and safe.

Oyefeso said there had been an increase in the number of new customers joining the platform, adding that over 1,000 residents signed up for the services recently in Lagos.

Aside the increase in the number of customers, the network, according to him, has also witnessed increased number of transactions at all active merchants’ locations in the state.

Speaking with our correspondent, the Secretary, Olokooba Ventures, Ms. Adesola Basanya, from Ajah, said the Estate consultancy firm recently joined the Freedom Network because it saw opportunities in the whole effort of providing financial access to the unbanked.

According to her, the company which covers Abijo area of Ibeju Lekki as a merchant has attracted a lot of people who have never operated any bank account before.

Though, she could not immediately reveal the number of people already benefiting from the merchant point Olokooba Ventures offers, Basanya said no day had passed without huge transactions on the network at her location.

Her opinion was that the system was good but required massive public enlightenment for more people to latch on to it.

The Head, Operations, 3Line Card Management, Mr. Chinedu Eluchie, who spoke on measures put in place by the company to ensure that people do not lose their money, said, “We have put in place several measures to ensure that transactions on the network are safe. Every activity on the PoS terminal must come online to our system. So, we view all transactions real time on our system. Also, all the merchants operating at the merchant locations are mandated to prefund their accounts, which mean that for every activity they do at their locations, they are required to set aside fund to take care of those transactions.”

“And for every customer that goes to the merchant location, they get a receipt for every transaction and they can always confirm the balance on their cards. If they are not satisfied with what the merchant has given to them, they can go to any ATM and crosscheck the balance on their cards,” he added.

Source: Punch