An Assessment of Financial Inclusion

Dr. Olayinka DAVID-WESTDepartment of Operations,

Marketing & Information Systems

Email: ydavid-west@lbs.edu.ng

Outline

• Background/Introduction

• Financial Inclusion

• The 3-Edged Sword

Demand

Supply & Distribution

Policy

• E-Banking Heads Call to Action

#sustainabledfs

Background

#sustainabledfs

Lagos Business School (LBS)

• Business School of the Pan-Atlantic University (PAU)Founded: 1991Mission: LBS is a community of people committed to creating and

transmitting management and business knowledge based on a Christian conception of the human person and of economic activity and relevant to Nigeria and Africa at large. We strive to be a world-class business school which will have a significant impact on the practice of management.

• Programmes: MBA (Full time, EMBA, MEMBA)Executive Programmes (CEP, AMP, SMP, OMP, MAP, AgMP)Seminars and Custom Programmes

• QualityInternational Accreditations: Association to Advance Collegiate Schools of

Business (AACSB) & Association of MBAs (AMBA), Financial Times ranking in open enrolment executive education and custom

programmes.

The SIDFS Initiative

• Launched in 2015

• Bill & Melinda Gates Foundation (BMGF)

Objective: to enhance the adoption of digital financial services as a tool for financial inclusion and economic growth through research, advocacy and capacity building.

• MasterCard Centre for Inclusive Growth

Striver Insights & Learning Needs Assessment

• Multi-disciplinary team lead by Dr. Olayinka David-West

SIDFS

• Scope of Work

Secondary data analysis (demand-side)

Supply-side studies

Providers – Assets, Resources & Capabilities

FMCG – Distribution/Route-to-market

• Outcomes

Industry Engagements

Expert Knowledge-sharing

Academic & Professional

Student Case Competition

2016 State of Market Report

Consumer + Supplier Insights

FI in Nigeria: Chronology

#sustainabledfs

ACCESS to and USE of DIVERSE financial services at an AFFORDABLE cost

2 billion

1 billion

60+ million

Consumer FS

INSURANCE

INVESTMENTS/LONG-TERM SAVINGS

pensions

LENDINGcredit/borrowing

PAYMENTS

salaries, remittances, benefits, P2P & bill payments

Mobile Money Opportunity

#sustainabledfs

Demand-Side: Consumers Insights

DFS Inhibitors

11

Under-banked

MM

Account

Unbanked

MM Account

#sustainabledfs

Consumer Profiles

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Consumer Profiles

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Is this Enough?

PSYCHOLOGICAL & BEHAVIOURALrisk, malleability, financial orientation, financial attitudes, resilience, relations, financial identity

Supply-Side: Resources & Capabilities

Resources & Capabilities

#sustainabledfs

Competencies

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Business Models

1

8#sustainabledfs

Distribution

FSPs

Source: Fspmaps.com

Bank

4,989commercial Banks

869offsite ATMs

48 Bank Agents

Source: Fspmaps.com

Agent

3,567 active

AGENTS

Source: Fspmaps.com

Regulatory-Side

Policy Evaluation

• Infrastructure

• Last mile distribution

• Know-Your-Customer (KYC)

• Interoperability

• Competition

• Collaboration

• Consumer protection

• Business environment

• Consumer education

Doctrinal Analysis of legal instruments: laws, regulations, policies and guidelines

• Research Reports

LBS/SIDFS SoMR

MicroSave Agent Network Analysis

• Discussion Themes

Policy and Regulation

Last Mile Enablement of DFS

Responsible Finance

• Partners

IFC

MicroSave

BusinessDay

CeBIH: Call to Action

“We need banking, but we do not need banks anymore.”

Bill Gates, 2015

The DFS Challenge

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Extend FS to underserved/Financial Inclusion

Improve Security

Increase Efficiency

Employment Opportunities

Lower Transaction Costs

Eliminate barriers - distance, access

Enhance Commerce

Ease Remittance

Financial Empowerment

Support Microfinance

Affordable

The potential of DFS remains enormous if well exploited

DFS Opportunities

• Productivity ⋯ 6.6%• Investments ⋯ 4.6%

• GDP ⋯ 12.4% ($88 billion)• 3 million jobs

#sustainabledfs

Person (P) Business (B) Government (G)

Person (P) USD 89 billion USD 56 billion USD 26 billion

inbound/outbound remittances

cash in/cash out

wages

dividend payments

wages

welfare

pensions

agriculture credits

Business (B) USD 95 billion USD 317 billion USD 36 billion

bills — electricity, cable TV

other — school, medical

airtime/top-up

savings/investments

supplier/distributor

paymentsinvestments

rebates

agriculture credits

Government (G) USD 4 billion USD 62 billion USD 6 billion

bills/tariffs

taxes

bills/tariffs

taxes

agriculture inputs

statutory payments

sub-national accounts