FinTech serves as major driver for financial inclusion of underserved, unserved communities- NCC

 

The Nigeria Communications Commission (NCC) has described the Financial Technology (FinTech) industry as a major driver for financial inclusion to reach the underserved and unserved communities across the country and further stimulate economic growth.

The Executive Vice Chairman (EVC) of the NCC, Dr Aminu Maida, made this known in his keynote  address at the Nigeria Information Technology Reporters Association (NITRA) FinTech Forum with the theme “Harnessing Nigeria’s Fintech Potential: Challenges and Opportunities” on Thursday in Lagos.

Maida, who was represented at the event by Controller, NCC Lagos Zonal Office, Mr Henry Ojiokpota noted that the theme “Harnessing the Nigeria’s Fintech Potentials: Challenges and Opportunities” is topical in the financial industry considering the significant rise in Digital Financial Services, adding that such progress is inextricably related to several initiatives and collaborations between stakeholders from relevant industries.

The EVC said that Fintech is gradually revolutionizing Nigeria’s financial ecosystem as it poses a great disruption to the conventional financial system, adding that as an emerging industry that leverages on technology to support several financial services such as mobile banking, borrowing, investment, cryptocurrency among others, Fintech comes with a lot of business opportunities in terms of innovation, job creation and investment.

“Therefore, Fintech has the potential to deepen the existing payment and financial system infrastructure to reach unserved and underserved areas and further stimulate economic growth.

“Fintech applications such as robo-advisors, payment apps, peer-to-peer (P2P) lending apps, investment apps, and crypto apps, among others, create business opportunities for individuals. With the youth population accounting for an estimated 70 percent of Nigeria’s population, the digitally savvy, young, and middle-aged individuals adopting these Fintech applications for socioeconomic gains will add value to the economy. Recent industry statistics has shown that active subscriptions across mobile networks in Nigeria rose to 220.7 million in August 2023 (NCC).

“Similarly, the increasing rate of smartphone penetration, internet access, and focused regulatory drive have continued to create a favourable atmosphere for Fintech to thrive. Furthermore, greater accessibility to customers, convenience, and low-cost access to short-term loans will further deepen the acceptability of Fintech products and services. Records have shown that the Fintech sector has benefited a lot from external investment, amounting to over US$I billion investment since 2018.

“The National Financial Inclusion Steering Committee, which is a committee of stakeholders from the public and private sector,  has been at the forefront of promoting inclusive growth and development through financial inclusion. The Committee recognizes the place of innovative business models in achieving financial inclusion objectives and facilitating inclusive growth in the Nigerian economy.

“ It is in light of this that the Committee developed the National Financial Inclusion Strategy policy document to fast track the growth and development of a Nigerian Fintech ecosystem that can favourably compete globally. This strategy provides the roadmap for unbundling several untapped potentials and benefits in the Fintech ecosystem.

“Through the Financial Inclusion Channels Working Group and other working groups of the committee, giant strides are being made to address issues that have militated against the growth of Fintech in Nigeria. This is to harness and retain the talent pool in the Fintech space and the goal of mainstreaming it into the main Financial Service sector.

The International Monetary Fund (IMF) report ‘Nigeria: Fostering Financial Inclusion through Digital Financial Services of March 2023 ” confirms that financial inclusion in Nigeria recorded a lot of progress recently.

“As at the end of 2022, the Central Bank of Nigeria had granted 5 Payment Service Bank licenses in Nigeria to Hope PSB, 9PSB, MTN’s Momo PSB, Airtel’s Smart Cash PSB and Globacom’s money master, which have contributed to the development of the Fintech in Nigeria,” EVC said.

According to him, “The Nigerian Fintech ecosystem offers a full array of financial services, which has prompted consumer protection concerns over predatory pricing and regulatory challenges in the sector. Similarly, telecommunications infrastructure, which is an enabler for Fintech services, remains an issue of concern. Statistics indicate that Broadband penetration stood at 45.57 per cent as of August 2023, which is a fair progression towards the mid-term broadband target to be met in 2023. The Commission has begun implementing new strategies to meet the new target of 70 percent Broadband penetration by year 2025 as contained in the Nigerian National Broadband Plan 2020 — 2025 which will equally explore the potentials in the Fintech sector.

“Digital financial services will continue to have a significant impact on Nigeria’s financial inclusion

and the digital economy at large. This is because of the optimal utilization of digital technologies in the provision of financial services to rural communities and underserved segments of the population by leveraging on high mobile phone penetration in Nigeria.

“In a nutshell, such measures extend financial services coverage and create avenues for affordable solutions. Therefore, coming up with new digital financial business models and initiatives as well as huge investment in digital infrastructure and e-commerce that will open the market and further stimulate development in the Fintech sector.

Maida affirmed that the Nigerian Communications Commission, as the apex regulatory agency of the communications industry, will continue to support the Fintech sector in harnessing its enormous potentials as well as overcoming the challenges identified.

“This can be achieved through adequate provision of secure infrastructure and USSD channels that enable delivery of Digital Financial Services delivery in efficient ways. The NCC is also keen on maintaining minimum standards Quality of Service (QOS), for an uninterrupted network that will boost the sector. In support of this objective, the Commission has

executed the Memorandum of Understanding with CBN on driving payment systems and financial inclusion, which is in line with the Nigeria Payments System Vision 2025.

“Furthermore, the Commission is playing an important role in harnessing the potentials of Fintech through maximum support for Fintech policies, enforcing regulations, and strengthening collaborations with relevant authorities such as the CBN and other stakeholders.

“Beyond this, the NCC is also promoting  incubation and sound practices of Fintech firms and highly secured platforms to further enhance the development of the Fintech ecosystem as well as the digital economy space in general. These measures would ultimately enable the attainment of the objectives of the Nigerian Startup Bill, particularly in the Financial Services sector, and maximize the benefits of Fintech while mitigating the risks involved,” he emphasized.

The Commission, he said, within its statutory mandate, will continue to ensure that the regulatory environment supports the growth and success of Fintech in Nigeria for the overall development of our digital economy.

Earlier in his welcome address, the Chairman Nigeria Information Technology Reporters Association (NITRA),Mr Chike Onwuegbuchi, said FinTech had become the most exciting sector in the Information Communication Technology industry, and Nigeria, as a whole.

Chike said that this focus on a sector that is seen as the engine of financial dealings, economic growth and transactional unification, is touted to present and aid various other sectors from the grassroots to international business/trade.

He noted however, that Nigeria saw a slowdown in Fintech funding in the past few years according to a Partech Africa’s tech Venture Capital Report, while the report noted that Nigeria recorded $798 million in 2022 from $1.3 billion recorded in 2021.

He declared that the regulators in the space, operators and stakeholders would address some of the challenges affecting the growth of FinTech in the country at the forum,

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