New Vista to Deepen Financial Inclusion Beckon with COVID-19

THE Covid-19 pandemic is forcing companies, especially those in the financial services sector to rethink their strategies.

This is because during the Covid-19 complete lockdown of some parts of the country, financial transactions and payments were largely carried out through Digital finance services platforms.

Now, some banks are considering focusing more on delivery services much more through the platforms.

However, in spite of its positive impacts on moving the economy while the lockdown lasted, it opened opportunity to develop other aspects of the ecosystem such as reducing the number of financially excluded in the country as well as providing robust digital financial tools.

According to FasasiSarafadeen Atanda, managing director, Ecosystem Hybrid Network – a banking agent, “the pandemic provided good opportunity for digital financial services initiatives to achieve its goal as it encourages social distancing as well as discourages the use of cash in transactions which are some of the things DFS guarantee. Unfortunately, we did not optimize that opportunity because we didn’t plan for it.

“What we should have done was to prepare for expansion of digital financial services to serve more people. T he crowd witnessed at bank branches immediately the lockdown order was eased means that great number of Nigerians still rely on conventional banking.

“We expected federal government and other stakeholders to have capitalised on the opportunity to open

more accounts for unbanked population thereby reducing the number of financial excluded rate.

“When giving financial palliative, instead of giving cash directly to people, they would have been advised to open account at banking agents’ locations that were operating during the lockdown and root the payment through their account. Brazil did it and it worked.

For Emmanuel Okoegwale of Mobilemoney Africa: “In most parts of Africa, millions of people do not have access to basic financial services due to many factors such as low literacy, low mobile device ownership, lack of acceptable identification, limited bank branches, low economic activities which presents a compelling opportunity for government interventions (emergence, short or long term) as a leverage for payment digitization and financial inclusion which can address all the issues militating against the access to formal financial services since governments can provide or waive some requirements and address the low economic activity of intended beneficiaries through the government grants payment.

“Digitization will help governments to scale their coverage and reach, in an effective and efficient manner such that millions can be reached instantaneously and simultaneously.

“It will save governments enormous cost, improve citizen’s trust, improve accountability, transparency of interventions, reduce physical barriers especially in many parts of Africa with significant infrastructural deficiencies across urban and rural areas”.