They understand how to join forces to create value, spread value, and increase value for the majority of the informal sector – not just opening of bank accounts.
They are coming together now. All the pieces on the chessboard are now coming together. The strategic players are aligning for the good of the industry. The eagles are gathering and this is a sign that the Central Bank of Nigeria [CBN]’s plan to attract 80% of Nigerian adults into the formal financial sector by the year 2020 will be achieved.
Before now, doubts abound about the feasibility of the CBN’s financial inclusion plan. The doubt is not misplaced. Coming from the players on the field and who have firsthand information about the activities of the super-agents have made the doubt well placed.
The CEO of Innovectives, the last mile partner in the financial inclusion and retail payment space, Emmanuel Agha, had said in a media report said Enhancing Financial Innovation and Access (EFInA), the agency at the forefront of promoting the financial inclusion, may not achieve its year 2020 goal.
Why did he say so? He explained that at the rate the super agents are working, the country may end up with more bank accounts without adding value to the ecosystem. However, to overcome this challenge and increase the financial inclusion spread, the present financial access touchpoints need to increase.
He reiterated that this can only be achieved through agency banking. EFInA has achieved only 48.6% based on its 2018 report. It has between 2019 and 2020 to attract another 31.4% to increase the financial inclusion ratio.
But the arrival of Interswitch, Africa’s integrated digital payment company and pioneer mobile payments firm and Paga at the party, means that the financial inclusion ratio will increase for several reasons. In the first instance, the duo would drive innovation in Nigeria’s financial ecosystem.
That is corroborated with a media report that Interswitch and Paga have joined the Open Banking Nigeria. They have done so simply to drive “the adoption and promotion of a standard Application Programming Interface (API) for financial services in Nigeria”. Nigeria would now have standardised APIs, which means how the informal sector makes and receives payments would be transformed.
Added to this, Paga, a mobile payment company, has served 12+ million customers who are located in the hinterland. It has processed over 72 million transactions worth $4.6 billion in 10 years of its existence. It is building an ecosystem to enable Nigerians to send and receive money digitally. By collaborating with Interswitch, the duo will create a simpler, richer and deeper financial access for Nigerians of all ages.
On the other hand, Interswitch, the provider of convenience and real value for consumers, is an Africa-focused integrated digital payments and commerce company. It facilitates the electronic circulation of money and the exchange of value between individuals and organisations on “a timely and consistent basis”.
The two firms understand what is at stake. They understand how to join forces to create value, spread value and increase value for the majority of the informal sector – not just opening of bank accounts – and boost the confidence of Nigerians to join the financial inclusion train. This was echoed by Jay Alabraba, the co-founder and Director of Business Development of Paga.
“We understand the importance of collaboration to achieve the goal of extending the frontiers of payments and financial services as a whole… it would further advance our innovative drive, broaden the wide range of our solution offerings to customers, and favourably position Paga to contribute to deepening financial inclusion in Nigeria.”
On his part, Akeem Lawal, the Divisional CEO for Payment Processing at Interswitch explained that the company is committed to working with the banks and the CBN to actualise the Payment Systems Vision 2030. With these two giants coming together to support CBN’s agenda, everybody is a winner.