 Welcome back through Blazing. I'm experienced there out on the shipping and maritime services in the country. While the fintech ecosystem provides a full rest, uptake of digital financial services, notably mobile money is still lower than in pair countries due to preference for cash operations as well as cost and trust issues. My guest, Ninka Awosonya, is currently the research lead of InterPoint, the data and research arm of tech premier media, publishers of Tech Point Africa. Over the last three years, he has overseen the release of 15 reports and counting. Many thanks for joining me, Ninka, on Business Insights and Plus TV Africa. Thanks, Jason, for having me. It is a pleasure to have you. Alright, so let's just dive into it. First of all, it is really alarming to note that as in this 21st century, it is so, so, so funny to see that Nigerians still don't have bank account and some of them are still on bank tap. In your opinion, why do you really think that is, although some people have said it's education, but I want to believe that even people in the village have some level of education? Yes. Yeah, there is a part of education, but not really education in the sense that they did not attend a formal education. Education in the sense that they don't know why should I own a bank account or why should I be in the banking system. Why do they need it? They don't. That education, that part of the education is really the key. Not that, yeah, there are people that are just primary school self-orders or secondary school that have bank accounts. And to be honest, it's a fact that we can say they are educated and people with no formal education with bank accounts. So it's not really education, but education in the sense that, yes, people don't know what to do. How do I go about opening the bank accounts and stuff like that. So that's really one of the things. Okay, so who should actually, who should the book fall on or rest on right there? As in, in terms of not having knowledge, maybe at the hinterland or even some areas in the cities. Because one would have thought that there are so much ways that communication can be done about banking and all that because we hear about banking services on radio, on television, even newspaper print and magazines and even from pair to pair, most people talk about banking. So how is it that we're still low at that level? Okay, so this is it. So it states, I mean, it states like legal states, over a thousand commercial bank branches, for instance. And then you go to somewhere like Taraba. They only have 20 commercial bank branches, 20. And then for some people, they believe that they have to go to a bank account, I mean a commercial bank to open an account. So you have agency backing guys that allow you to open a bank account. Yes, there are limitations on what you can do with this kind of account. But then there are those that allow you to open a bank account. But then there's a fact that, yes, most people don't know that yes, you can actually open a bank account. The report I released a couple of months ago, so one of the reasons why people say they don't have a bank account is because they don't know that you can actually open a bank account with these guys. You mean with POS guys? They don't know that they can help you to open a bank account. And then, so there's the POS guys, they also have the payment service bank, the PSBs, which about four or ten of them are already licensed or you know. They don't know that they can open a bank account with these guys. So I think that the box is for them to educate people that yes, you can work up to these guys and get them to open an account for you. So it's been almost over ten years since the central bank started its financial inclusion drive that since 2012 and all that. And in that time, one would say that the influx of fintechs and agency banking has actually increased since the pandemic and all of that. But how much, how would you rate the performance level as regards the fintech penetration in the country? Because some people believe they are seemingly taking the place of the average commercial banks. Yes. One, the fintech guys are really doing a tremendous job. And yes, some of them are doing what the commercial banks are doing. So basically banking, the people that are already banked, not banking, those that are unbanked. Yes, they've done that. So one way that I believe that they've done tremendous work is in, yes, financial inclusion goes beyond just having a bank account. So right now, from your phone, you can invest in stocks, traded on the Nigerian Stock Exchange or New York Stock Exchange. Or even insurance. You can buy insurance from your phone and these guys are making that possible. Which say 10 years or more, it's not possible. So say you want to buy shares back there, you have to go to the bank or go to a stock broker to do that. But now I can do that from the counter. Yes, these guys are doing that. There is this the fact that yes, most of them are just basically banking the people that are already in the banking system. And you have guys like us that are doing digital payment. But then you are still, say, your major market is still places like Lagos, Abuja. The major cities. So why are they not going to the hinterlands? So it might not make business sense for them. Is that not the objective in the first instance to actually bank the unbanked? Yes, the objective is to bank the unbanked. Or if I am going to, as a business person, I'm going to invest in having a branch or having staffs in the hinterland. So I have to be sure that yes, the revenue or what I'm getting from there will be enough to cater for this. But they seriously need to have physical branches at those locations before they can operate. To a very large extent, you need people in this, so I can buy something on my phone without having to talk to the person. You can do business to business. I can do business on my phone. That's because to a very large extent, I know that the chance of me being cheated. Yes, there is chance that I could get duped online. But because I know that yes, this chance is lower for me because of what I know. But the guys in the hinterland doesn't. They need to see you physically for you to transact with you. So yes, these guys, they send money to their children in school and so on. How do they do this? They use those banking agents. You want to send money to people in the village now. They go to an agent, get the agent's account, the person sending the money. They collect the money. Because the agent is someone they know, someone they live in the same neighborhood. Is it a trust issue or what exactly is it? Trust issue. Because why would they rather want to send through an agent than even get an account in their own name so they can actually use it beyond their vicinity when they need to make some travels or trips or something? So there's a trust part and there's also the part that yes, I get an account and then I get charges. On authorized doshions. So one of the reasons why these guys said they don't want to back out is bank charges, a lot of documentation to open a bank account. And the people that have bank accounts and money, they are major edit is bank charges. We'll take a break and we'll come back because I believe that most of them, these microfinance, even mobile operators, they operate account openings. You don't necessarily have to be there or even documentation. You just need maybe your BVN. You need to get a bank account or maybe national identity number or something. We'll talk more about that. It's still business insight and plus TV Africa. We're looking at financial inclusion. We're looking on how to mitigate against this gap that has presented in terms of a banking of the hinterlands in a moment. We'll be right back to talk more with our guest to join us again. Welcome back. It's business insight and plus TV Africa. My guest is Yinka. I also have been looking at the central bank financial drive and of course how to reach the unbanked in Nigeria. Thanks for staying with us, Yinka. So just before we took the break, we're talking about how these people who are scared of this cost implication can actually go through these agencies or even from their own phones, you know, more like play to business and actually get these accounts by themselves. And even those guys, they don't even charge most times for transfers and some of these services that they provide. So how come we're not really making the most of all of these advantages, does it? Yes, they can do that on their mobile phone. So from the reports, majority of people that don't have bank accounts or their money, they either don't have a phone. Oh wow. Or they use a fissure phone. Or a small touchlight phone. Or a smart fissure phone, which is just a little bit ugly. Okay, so that's another issue. Okay, fine. Okay, let's look at another angle, the fintech operations in Nigeria. Fine, we are doing well as it is, but when we compare to other countries of the world, we're seemingly still scratching the surface. So what do we need to do to actually make it more like a hub here in Africa? Okay, so yes, the civilian is already doing some stuff in that aspect. So there is a PSB license a couple of years ago. But the only issue I think I have with that is that. So the provision, which I think makes business sense, which is why they did this. They have to have at least not less than 25% of their touch points in rural area. So why not to be the other way around and make it 75%, not less than 75% because in rural area, because this is where these guys really need the services. Not in the urban area. If I walk out of my street, about four or five PSB agents, I'll sit there. Then about two streets away, there are about like four or five commercial banks on my stretch alone. But go to these places. For the gateway commercial bank, you are taking a distance. But if we have, say, PSB in these areas closer to these people and they can walk into this place, get a bank account, do transaction and stuff like that. I believe we really go beyond scratching the surface. And then when we bring them into the market system, then we can then offer them more services, insurance, investment. Okay, let's talk about some of the highlights from your report. You talked about penetration of financial facilities. You said, for instance, Lagos accounts for 29% and 21% of commercial bank branches and agency banking network in the country, respectively. So why are we not releasing a much deeper penetration? Okay, business sense. So if I'm in Lagos, the chances of me getting more business is slightly higher than if I go to a remote area. So it might not be the sense for these guys to really... So which might be a case of CBA giving these guys incentive to really go to this rural area? Because people in the city, hardly anyone in Lagos, except if the person doesn't need a bank account. And you walk to someone that doesn't own a bank account in somewhere like Lagos, Aguja. But go to other places, it's not the case. So if you do that and they're incentive for these guys to go to this rural area and provide services for these people, bring them into the banking system and then give them other services, other financial services, because financial equity goes beyond just owning a bank account. So tell us more about other major highlights or high points from the report that you released. Yes, so another key thing is retirement service, which is also another big issue. So as of 2021, there are about 6 million employed Nigerians, but only about 10 million are the retirement service. Why is that? What's the issue? Is it awareness again or what? I thought it was actually a law for you to be in employment and you should have an RSA. So there are those in the formal employment, there are those in the informal employment. So there is this micro case or micro pension plan for those in the informal employment. So that you don't have to be someone, so you have any income yourself, you have your own CEO, you can do that. And then I've seen a lot of ads asking people to come and do it. So it's just a very case of doing more of that, I'm not just having bananas everywhere, going to talk to these people. Yes, you can do this, you can do that. So that way we can really move more people, because 10 million to 60 million, that's a wide gap. And even from the 10 million, so 3 in every 10 of those guys, I feel you. Yes, so if you put 10 people together with retirement service, feel of them. Yinka, I would have to talk about that particular aspect on another edition of the show. There are so many hands in the air, my director is actually chasing me from the studio as well. But we must say a very big thank you to you for joining us on the show for today. We would appreciate your time. Yinka, I was the research lead at Intel Point, and that's the size of the show for today. I am Justin, academia business insights, return to game next time at the same time on your screen. Bye for now.