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How Agent Banking is Driving Financial Inclusion in Nigeria

Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele

There is no doubt that the Financial System Strategy 2020 goal set by the Central Bank of Nigeria (CBN) towards 80 per cent financial inclusion by 2020 can only be possible by a careful execution and collaboration by every stakeholder.

Financial inclusion means that irrespective of income level, all individuals, households and businesses have access to financial services and products that address their needs.

Given that a significant number of Nigerians are low-income earners and are also financially excluded, it is paramount that inclusion be driven, since it has been established that a high exclusion rate is prevalent in the country. Increased access promotes capital accumulation, credit creation, increased economic activity, and increased investment.

Agent banking is the delivery of financial services outside conventional bank branches, often using non-bank retail agents and relying on technology, such as card readers, Point-of–Sale (POS) terminal or mobile phones for real time transaction processing. A banking agent is a retail or postal outlet contracted by a licensed deposit taking financial institution or a mobile money operator to provide a range of financial services to customers.

According to CBN the novel banking system is aimed at enhancing financial inclusion as banking agents are expected to act as delivery channels and to offer banking services in a cost effective manner.

Under the guidelines, any financial institution that intends to engage in agent banking will have to apply for approval, stating the extent of agent banking activities and responsibilities of the relevant parties.

The apex bank said in its guidelines that the bank applying to engage in agent banking should attach to their application, a copy of their board approval, outlining the strategy of the financial institution, including current and potential engagement, the geographical spread and the benefit expected to be derived from agent banking venture.

The applicant, it said must show proof of competence in the operation of agent banking, integrity and the extent of its outreach.

Also, the banks are expected to provide the service level agreement, agent banking contract, the risk management, internal control mechanism, operational procedures and the proposal for Know -Your- Customer (KYC) and anti-money laundering and combating Financial Terrorism (KYC\CFT) compliance.

Under the agent banking arrangement, a financial institution may engage super agents that are the agent networks that will establish a collection of outlets or franchise within its wide network of outlets to be under its supervision and control.

The bank can also engage sole agent, meaning the agent who does not delegate power to other agents, but assumes the agent banking relationship by itself. It can also engage a sub-agent, which is the network of agents to be under the direct control of super agents as may be provided in the agent banking contract.

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Some banks in the country have made significant impression on the financial inclusion drive by ensuring that banking services get to the hinterland of the country with the agent banking model.

For example, First Bank Nigeria Limited is one of the banks keying into the agent banking platform. It has designed sustainable products and services to meet the needs of its stakeholders, especially people in disadvantaged and low income segments of society, who, for various reasons, do not have access to financial services.



Through the mobile money platform, , as well as the employment of the agency banking model, the bank continues to provide financial services for the unbanked and under-banked.

In 2016, the mobile money wallet customer base grew from 3,704,963 to 4,035,307. Firstmonie agents are now in over 10,000 locations with over 98 per cent coverage in Nigeria.

As at march 2019, the bank has 22,000 agents across the country and the agents are operating in at least 755 out of the 774 local government areas in the country.

Speaking recently in Lagos at the Future of Finance West Africa Conference, the Deputy Managing Director, First Bank Nigeria Limited, Mr. Gbenga Shobo, said the bank’s agents process over $490 million worth of transactions monthly.

Shobo noted that to support the federal government’s objectives to deepen financial inclusion, “the bank sought and got a mobile money license in 2012.”

He stated that its Firstmonie wallet platform had over four million customers and a spread of agent network that was expected to grow to 50,000 in 2019.

According to him, “To support the federal government’s objectives to deepen financial inclusion, First Bank sought and got a mobile money license in 2012. Firstmonie has had a transformational impact on reaching low-income and historically unbanked households in Nigeria.

“It is integrating them into the wider financial system by providing access to a range of banking services including account opening, fund transfer capabilities, Identity management (BVN) and savings.

“After a successful roll out of the Firstmonie Agent network 2018, the business has grown to a network of over 22,000 agents processing over $490 million worth of transaction in monthly value and a unique transaction count of 10 million monthly.”

He said that the bank has spread across all the Local Government Areas in the country, and had deployed technology, invested in recruitment and training to ensuring that more Nigerians were reached.

Firstmonie Agents are positioned within rural and semi-urban locations across the country to provide basic financial services such as account opening, cash deposit, cash withdrawals, airtime purchase, bill payments and much more to every Nigerian. Through this channel, the bank is committed to providing convenient services that endear trust; provide ease of access to financial products, thereby saving time and travel costs.

“The Firstmonie Agent network is succeeding in reducing the financial exclusion rate nationwide (a very critical objective of the Central Bank of Nigeria).”

Commenting, Group Head, eBusiness, First Bank of Nigeria Limited, Chuma Ezirim, said: “FirstBank is focused on building a quality agent network in the country by deploying a robust risk framework and the right product mix to ensure viability and security of the network, aimed at deepening Financial Services access, especially in the un-served and underserved segments of our market.”

To further enhance inclusion and grant more access options to customers, the bank has maintained the largest ATM network in Nigeria by setting up over 2,700 active terminals around the country, which equals 15 per cent of the total number of ATMs deployed in the country.

Taking advantage of the high penetration of mobile phones, FirstBank saw an opportunity to piggyback on mobile technology and further drive access, hence the launch of its mobile app, FirstMobile in September 2015. The app has seen significant uptake, from 200,000 to more than a million customers in less than a year, making it the fastest growing banking App in Nigeria by 2016.

N1 trillion mark

According to Dr. Adesola Adeduntan, the Chief Executive Officer, First Bank of Nigeria Limited; “the firstmonie scheme is supporting the Federal Government’s empowerment and job creation agenda as over 22,000 Nigerians, through this scheme, contribute to the increased economic activities of their neighborhoods.

“Our partner network is growing and we are particularly delighted about the progress we are making in actively driving nationwide financial inclusion, exposing communities to opportunities for growth, jobs, empowerment, and improved live conditions. Yet again, we are delighted to score another first in promoting financial inclusion in the country.

“We appreciate our partner network and remain committed to working together to achieve even greater impact on the lives of Nigerians.”


Mrs Adefesobi Olubisi, a retired Vice Principal and owner of Makwhite Ventures in Apata area of Ibadan is one of the newest additions as a Firstmonie’s agent. She was full of praises to the management of First Bank.

I am an agent with Firstmonie and I am happy with it. While I help the bank make more customers, customers also have access to their money. I am also making money too. It is also a way of opening new stream of income.

“On daily basis I do make a minimum of 12 transactions and this is higher at weekend and public holidays.