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Sunday, 5 October 2014

Financial Inclusion in Nigeria - Part 1


MasterCard presented its reports on the Road to Inclusion.  The report covers individuals in emerging markets of Nigeria, Egypt, India, Indonesia, Vietnam and the Philippines that been excluded and underserved.

The term inclusion as used in this circumstance should be clarified.  Inclusion in this stance means enabling individuals who are unbanked to move from cash to alternative form of payment either prepaid card, mobile wallet and virtual payments.  

MasterCard commissioned this report in order to understand the dynamics of the financial services industry especially in the emerging countries and also to address bringing in as many people into the main financial stream.

Omokehinde Ojomuyide, VP and Area Business Head West Africa said that the purpose of the report is to  “Understanding the needs and attitudes of consumers provides us with important insights that will help us serve them better. For instance, communicating bank safety and interest rates could potentially encourage the financially excluded and the financially underserved to use electronic payments more often than cash. With the right approach there is huge potential to bring many people into the financial fold.”

Based on the study the following are the Characteristics of the Nigerians excluded from the financial services.

Demographics

Average age
28 Years Old
Secondary Education
91%
Have Employment 
64%
Household Monthly Income
$200.00


Reasons for not having a bank account

Does not have enough Money
41%
Don’t want or need a Bank Account
17%
Need Cash on a Daily Basis
4%


Main Purchases of this group

Telecommunications
93%
Clothing
92%
Transporation
91%
Food
73%


Prepaid Card Appeals

Unique and different
60%
Relevant
60%
Likely to apply
58%
Have heard about prepaid card
65%
Have used prepaid card
0%
Prepaid will be of benefit
53%
Prepaid Cards help keep control of their spending
26%


Access to Technology

Standard Mobile Phone
85%
Smart Phone
32%
Laptops  
5%
Desktops
0%
Tablets
2%

Based on the analysis, majority of Nigerians that are excluded from the financial services have access to mobile phones.   The mobile phone could be used as an entry point into the financial system for these excluded individual using their phone as an additional verification and with this could help bridge the gap between the formal financial services sector and the millions of underserved or unbanked individuals.

Here is a link to the MasterCard Report on Financial Inclusion:



Part 2:  We will identify the players (stake holders)

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