How fintechs are driving Nigeria’s financial inclusion

Nigeria, Africa's largest economy, is making significant strides in driving financial inclusion thanks to the innovative solutions offered by Fintech companies and the support of telecommunications companies in the country. According to a survey conducted by Enhancing Financial Innovation & Access (FINA), approximately 40 million Nigerians are currently financially excluded. To address this issue and reduce the number of unbanked individuals, Fintechs have emerged as key players in the financial services sector. Adekunle Kunle-Hassan, the CEO of Summitech Computing, recently discussed the impact of Fintechs on financial inclusion in an interview with CNBC Africa. Kunle-Hassan highlighted the importance of Fintechs in reaching the underserved population, particularly through initiatives such as the Payment Service Bank (PSB) licenses awarded to some telcos. These licenses enable Fintechs to facilitate low-value, high-volume transactions, catering to the needs of individuals in the informal economy and the underserved demographic. Telcos like MTN, with their PSB MoMo platform, are well-positioned to bridge the gap in financial inclusion by leveraging their existing infrastructure and customer base. Kunle-Hassan emphasized the potential for Fintechs to drive innovation and create tailored solutions to meet the needs of the unbanked population. While progress has been made in increasing financial inclusion rates, challenges remain, particularly in rural areas where access to formal banking services is limited. Agent banking has emerged as a critical component in expanding financial services to underserved communities. By leveraging agent networks, Fintechs and telcos can extend their reach and provide essential financial services to individuals in remote areas where traditional banks are not present. Kunle-Hassan emphasized the importance of agent banking in driving financial inclusion in Nigeria and across Africa, highlighting the significant role of agents in facilitating transactions and expanding access to financial services. Looking ahead, Kunle-Hassan underscored the potential socio-economic impact of achieving widespread financial inclusion in Nigeria. With increased access to financial services, including microloans and insurance products, small businesses and individuals in rural communities can experience a reduction in poverty and an improvement in economic opportunities. Kunle-Hassan emphasized the need for supportive regulatory policies to enable Fintechs and telcos to offer a wider range of financial products and services to underserved populations, ultimately driving economic growth and financial inclusion in the country. As Nigeria continues its journey towards achieving universal financial inclusion, the collaboration between Fintechs, telcos, and regulators will play a crucial role in expanding access to financial services and empowering individuals and communities across the country.