Job creation boosted with access to financial services .FBN DMD, SHOBO

Nigeria is in a race to reduce the number of adults without access to formal financial services.  Sharing the experience of FirstBank of Nigeria Limited in this regard, Gbenga Shobo, Deputy Managing Director of the bank, in this interview with Babajide Komolafe, highlighted the lessons learnt, milestones achieved specifically through the Firstmonie agent network as well as the audacious financial inclusion activities of the bank.

Asides the nation’s population growth rate and the challenge of the pandemic, other major barriers to financial inclusion are lack of products/services that fit the un(der) banked and the low awareness levels for available products.

Nigeria has never been able to meet its financial inclusion (F.I) goals and this is despite the commitment by the CBN and the banks as reflected in the National F.I strategy.  In your opinion what is responsible for this underperformance, besides the nation’s population growth rate and the challenge of the pandemic?

Nigeria’s economic landscape undoubtedly has potentials to drive a significant proportion of the adult population to financial inclusion, and the achievement of this goal is dependent on key factors such as accessibility, affordability, education, technology/ infrastructure

Financial inclusion efforts experienced slow progress initially, however, in recent times there have been very deliberate efforts by the Apex bank in collaboration with different parties within the financial, telecommunication, and technology ecosystems to address / overcome noted challenges impeding the attainment of the desired goal.

Asides the nation’s population growth rate and the challenge of the pandemic, other major barriers to financial inclusion are lack of products/services that fit the un(der) banked and the low awareness levels for available products.

Financial illiteracy is also a major challenge. The illiteracy level and lack of trust of the Nigerian populace has a major effect on the adoption of existing products created by financial services providers. The un(der)banked have limited understanding of the benefits/impact of being part of a financial system.

Affordability is another challenge though this affects the entire nation. The target market (mostly bottom of the pyramid) finds it difficult to afford the services offered by most financial services providers. Unfortunately, these services come at a cost to the financial services providers as well.

At FirstBank, we are addressing the issues above via the Firstmonie channel in the following ways.

For example, our Firstmonie Agent network provides quick access to financial services at affordable costs. Customer do not have to travel for hours to make payments or carry out their banking or financial transactions. This reduces high transportation costs which had hitherto made banking prohibitive to the target market.

Also, our Firstmonie Mobile Wallet provides a simple account through which customers can carry out banking / financial transactions. The mobile wallet account requires no BVN and documentation and so makes it easy to bring in unbanked individuals into the financial system. Within the mobile wallet, we have been able to create and administer unique offerings best suited for the target market.

Furthermore, we periodically organise market storms to drive customer engagement and awareness. This is hosted around Agent locations to reinforce the Bank’s partnership with the Agents and drive traffic at the Agent locations.

In First Bank, do you have Financial Inclusion goals, targets and specific approach or focus?

As a leading financial institution, we have clearly defined goals to support the financial inclusion drive; leveraging diverse strategies for rapid adoption and growth of our digital channels, designed not only to promote financial inclusion but also meet specific product needs of the individuals.

Our footprints nationwide attest to the efforts put in place to accelerate the desired growth and ensure that a significant proportion of the adult population in Nigeria is brought into the financial circle. Ability to have access to a transaction account is a first step toward broader financial inclusion because a transaction account allows individuals to store, send and receive money and make payments. Our current focus is the growth of customer base to 32 million and increasing our Agent touchpoints to 100,000 by the end of 2020.

To further bring Financial services closer to the mass population, a no-frills Bank and Telco Agnostic wallet account is encouraged as only basic KYC is required to open the wallet account. Our Firstmonie wallet initiative provides a smarter way for individuals to make payments, buy airtime / data, send and receive money. The aim is to make financial services readily available to 11.2 million customers with just an active mobile number.

These are all in fulfillment of our promise to create easy access to financial services and promote effective use of bank and wallet accounts by account holders.

So how far has the bank achieved in terms of its F.I goals?

The past three years have been exciting for us. As a Bank we have been able to create a distribution channel (Agent network) that covers every part of the country, build an ecosystem to empower individuals and communities, and provide a no-frills account (mobile wallet) that allows customers carry out basic financial transactions without a bank account. The wallet is Telco and Bank agnostic and can be funded from multiple sources – debit card, bank account, and via any of our Agent locations. The miles achieved during this period are: Financial empowerment of over 76,000 Agents within the network; Over 228,000 indirect jobs have been created through our Agent footprints nationwide; About 26 %  of our Agent network are females resulting in financial independence and freedom; Over 390 million transactions processed by the Agent network which further confirms its accessibility and affordability.

We operate from every LGA across the country. This underscores the Bank’s commitment in bringing financial services to the doorstep of every Nigerian wherever they may be; and we have consistently led and championed the Financial Inclusion effort in Nigeria over the past three years of rollout of the Firstmonie channel.

What is the experience of First Bank in terms of the challenges of increasing F.I in the country?

Our experience stems from the segment of customers targeted for financial inclusion. These are somewhat different from traditional banking customers: on average, they have smaller accounts and lower financial and technology literacies; many are new to formal financial services; and their lack of experience usually creates barriers of trust and confidence.

We have taken banking down to their level. In a bid to surmount the challenges being experienced the bank has created innovative products and service offerings to cater to those in the bottom of the pyramid, some of which are:

These products include Firstmonie Wallet, an electronic wallet that allows individuals the convenience of making and accepting payments electronically with their mobile numbers. This is a tool used by developing nations to enable individuals participate more fully in the global financial system. The wallet is Telco and Bank agnostic and can be funded from multiple sources – debit card, bank account, and via any of our Agent locations. This makes it easier for the unbanked to open accounts.

Another product is FirstGem accounts, a bespoke solution to foster empowerment of women across the socio-economic strata. FirstGem which has recorded significant milestones is a product that is ideal for all women aged 18 years and above, whether working professionals or entrepreneurs; and it comes in two variants, savings, and current accounts.

We also have Agent Credit, is an innovative digital lending solution designed to solve immediate liquidity challenges especially when Agents account balances are depleted/low despite having cash at hand.

Furthermore, is BVN enrolment in local communities, where potential customers are registered through our Agent banking network in local communities.

We also conduct Financial literacy trainings. This is done through train the trainer methods in local communities, using key personnel of the bank. (Digital Product Sales Executives and Trade developers)

Among other things, the Revised National F.I Strategy aims to bring 46 million new individuals into the formal financial system. How many completely unbanked individuals is First Bank targeting to attract in the next two years?

Our targets at FirstBank for the next two years are audacious to meet with the ever-growing size of our population, hence, we align our goals with the collective target the Central Bank of Nigeria (CBN) has set for DMB’s. Given our antecedent for accomplishing great feats and track record on digital innovations in Financial Inclusion, we aim to multiply our achievements of past years.

One of the focus of the revised National F.I strategy is the MSME space and there seems to be so much efforts across the industry in this regard. What are major lessons for First Bank in terms of targeting MSMEs for financial inclusion and how do you intend to incorporate these lessons into future efforts in this regard?

Micro, Small, and Medium Enterprises (MSME’s) are the bedrock of Nigeria’s industrialization and inclusive financial development, as set out in National Financial Inclusion Strategy (NFIS). MSME’s play a significant role as the engine for economic transformation and industrialization for both developed and developing countries.

MSMEs are, collectively, the largest employers in a developing country like Nigeria, some of their key benefits are:  Improved income re-distribution (low level capital required); Job creation & skills development (particularly for youth, women, elderly); Adoption of technology & innovation (competitiveness); Industrial diversification; and stimulates local economy (demand down the value chain)

At First Bank we have identified that the future viability of MSME’s can be threatened by a lack of access to financial tools such as savings, insurance, and credit. Firstmonie Agent Banking was one of our responses to the NFIS in using MSME’s as a tool for Financial Inclusion. This innovation is a full suite of financial products and services that provide solutions to financial exclusion and enables registered and unregistered MSME’s to be created as Agents of FirstBank once they meet specific enrolment criteria.

A Firstmonie Agent is a financial service touch point in a local community. He or she  has an existing business he runs and is familiar with transaction dynamics relating to debits and credits. The Agent creates jobs and skills in his local community by hiring an attendant that runs his store and agent banking business

Our Agent’s businesses are covered by a comprehensive insurance package that protects the Agent’s businesses from risks associated with running a business.

We have also recently rolled out Agent Credit, an innovative digital lending solution designed to solve immediate liquidity challenges especially when Agents account balances are depleted/low despite having cash at hand.

MSME’s for a significant share of employment and GDP in the country and FirstBank will continue to partner with local businesses to surmount the challenges and continue to push the Financial Inclusion agenda of the country.