News Column

'Financial Inclusion Policy Has Come to Stay'

January 19, 2014

Ms. Abiola Bashorun , Chief Executive, Kunden Services Limited , African Representative of Mobile Cards Solutions Limited and Group Managing Director, Kasmal Group of Companies , is one of the ambassadors of the Central Bank of Nigeria's Financial Inclusion policy. In this encounter with Festus Akanbi , she dismissed the fears that the anticipated change of baton at the CBN would threaten the sustainability of the policy, saying the popularity of the financial inclusion policy is spreading like fire There is no doubt that the financial inclusion policy will outlive the tenure of the current management of the Central Bank of Nigeria . It is not a matter of survival anymore. It is excelling. This is because; monetary policies were being lopsided because at a point, it became difficult to determine the volume of money being traded within informal sector. Also, substantial number of Nigerians operate at the ratail end-these are traders and they do not have enough trust in the commercial banks for them to keep their money there. All these affect monetary policies. Cash management for banks is another huge problem. In my previous roles in banks, I lost some of my colleagues to armed robbery attacks. More often than not, the bank had to hire helicopters when Port Harcourt was volatile whenever we wanted to move money from one branch to the other. We had to spend huge amount on helicopters, armoured vehicles etc., all this amounted to huge amount of money and the cost is expensive to average Nigerians. Only a fraction of Nigerians are financially included, so it means we have a huge chunk out there and this include the retail traders at the base of the retail pyramid e.g. farmers and sellers of farm products, the simple provision seller- all the fishermen living in the hinterlands and on our islands around villages. There is a great need to encourage them to bring their money into financial inclusion. The Prepaid card has been identified as a major tool for this which is why we are launching huge pre-paid card schemes nationwide (where you don't need an account but you can load your card). Mobile money is another major tool for financial inclusion. We are also encouraging and teaching them to do some transactions using mobile money platforms. Phase one is to imbibe the culture; phase two is to increase their knowledge in the culture so that they are willing to have more trust that their money will not get missing. Controversy over who is better equipped to operate Mobile Money The situation now is that the telecommunications companies and banks are now working together. For most mobile money projects, we are having the banks and the telcos coming together at one point. The bank is the custodian and the legitimate organisation licensed to handle money. However, the infrastructure needed to reach out to the masses is the telephone, hence the telcos. So, a good person that wants to drive money knows that there must be a good synergy between the banks and the telcos. Financial Inclusion I believe there is room for improvement because the situation is like you have trained a child to walk; you just showed him major steps of walking. The next step is to hand holding him and take him through some movements. We have created awareness throughout Lagos State, we have shown them that this is good and we have addressed their fears. Presently, they are doing about 30 percent of their transactions electronically but because of other issues like connectivity in the system, it is also tempting them to go back to cash. But today, banks are equipping themselves electronically to meet the demand of electronic payment. So the next level is where they will be comfortable to do more of their transactions electronically. I can tell you that once the basic procedure of reporting fraud can be followed, the banks often refund such money but it is the knowledge gap-ability to do what you are supposed to do as the last consumer that matters. Once you let someone else to have the pin on your card, the bank cannot make any refund. Insurance on Electronic Cards As a welder of the people with the system, what my company is doing is to introduce insurance, very cheap insurance on cards and electronic payments such that in the course of using electronic platform, if anything happens to you, the insurance of cards, your mobile wallet would cover it even if the banks cannot. We are also training and retraining our retail sector- traders and business people in retail markets nationwide in conjugation with the Nigerian Interbank Settlement Scheme (NIBSS). We are also in close negotiations with insurance firms to provide affordable insurance packages and this is three-tiered. One is ATM, one is POS and the other one is internet transactions. You will be made to pick which of the insurance you want. We are talking to a very big insurance company from South Africa that has done this in South Africa and Kenya . I can say we are at 80 percent completion. The reason the Kundeen Services was led to do that was because we are part of major cashless Nigeria and we are handling various prepaid card schemes that will introduce over 15 million cards in the next 12 months. Also, as we look forward to a successful launch of the payment enabled national identity card on the MasterCard , Visa and Verve platforms, we have close to 100million electronic cards in addition on the prepaid going on in the market. With a minimum of N200, N50, you can have insurance cover; our people will enjoy great insurance cover on electronic cards. We are also going into strategic alliance with organisations like Nigerian Post Service, religious bodies and schools to take electronic payment services to the door steps. Financial Inclusion Campaign in Lagos Area In a bid to support and reinforce the CBN policy on the emergence of a cashless Nigeria , Kundeen Services Ltd recently embarked on a mass sensitisation of major markets in Lagos and Abia states via a road show on alternative payments and settlement solutions in collaboration with NIBSS. The activity which took place over a two-day period saw the sensitisation train visiting the major markets namely the Auto Spares Parts Machinery Dealers Association (ASPAMDA), Association of Progressive Traders (APT) and Balogun Business Association (BBA), all located at the International Trade Fair Complex in Lagos . The broad objectives of the initiative were to influence the adoption and sustained use of alternative banking/payment channels e.g. POS, NIBSS Instant Payment (NIP) and NIBSS Electronic Fund Transfer (NEFT), enhanced understanding and acceptance of alternative channels with a view to promoting financial inclusion of the unbanked/informal segment and gross reduction in costs and risks associated with cash transactions. To underscore the importance of the programmer, the Kunden initiative attracted the participation of Access Bank , Fidelity Bank , UBA, Diamond Bank , Enterprise Bank , Sterling, Skye Bank , GTBank, Mainstreet Bank and Stanbic-IBTC . The issues we discussed during our meetings with these traders included the numerous financial and logistic advantages of adopting electronic payments and settlement solutions offers by the banks compared to the traditional cash based mode currently in use. We made them to understand that the CBN Cashless policy currently in force in some states including Lagos is intended to introduce greater levels of efficiency in transactions processing with respect to reduction in risks associated with cash handling, turnaround time, safety, account reconciliation amongst other benefits. The traders were introduced to the different electronic platforms NIP, NEFT, Card solutions, PoS and Mobile and internet banking. In their feedback the traders noted some of their concerns and challenges with experimenting with the electronic payment alternatives. These include network issues, delays in simultaneous alert notification and bank transaction. We however assured that the authorities and the banks are working arduously to address them and that these will improve as the industry perfects the deployment of the necessary industry infrastructure. Nonetheless the traders expressed willingness to embrace the initiate and encourage their customers' migration to cashless transaction modes. Certainly, Kunden services will be taking the campaign to all key commercial centres in Nigeria .

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Source: AllAfrica

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