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Other Research

FinTech Landscape and Impact Assessment 2020

Fintech Innovation is an important driver of financial inclusion and very useful in providing access to financial services, especially in underserved/unserved areas.

In 2018, EFInA embarked on a journey to study the Nigerian fintech space because we understand the importance of innovative DFS for financial inclusion, this led to us conducting a foundational fintech study to understand the landscape and determine success factors for Fintechs to thrive.

Now, in 2020, we decided to update this study to reflect current trends (considering how quickly the market changes), capture the impact of fintech on financial services in Nigeria and provide interventions that EFInA & other partners can take to maximise the growth of an inclusive Nigerian financial sector through fintechs.

This Fintech study aims to accomplish the following:

Global Fintech Landscape

  • Understanding what the global FinTech landscape looks like and what areas FinTechs play in
  • Reveal how funding to FinTech evolved globally and the factors that are driving it
  • Identify the key trends shaping FinTech activity globally are
  • Outline the key enablers for a successful FinTech ecosystem based on learnings from global markets

Nigerian Fintech Landscape

  • Understand what is driving the growth of FinTech in Nigeria (size of the market, unmet needs)
  • Identify the key FinTech in the market and where they play
  • Capture how funding to the FinTech space in Nigeria has evolved and what the key considerations are
  • Reveal how FinTech evolve over time to take advantage of the opportunity that may arise

Impact assessment of FinTech in Nigeria

  • Outline the areas that FinTech can make an impact in Nigeria
  • Estimate the potential direct impact that FinTech can make on financial services
  • Identify what ways FinTech can contribute to capturing the overall opportunity from digital financial services

Recommendations for stakeholders

  • Outline the key imperatives for stakeholders in Nigeria’s FinTech landscape

Fintech Landscape and Impact Assessment Executive Summary

Fintech Landscape and Impact Assessment Report

Financial Services Agents Survey 2020

Agent banking is an important driver of financial inclusion and very useful in providing access to financial services, especially in underserved/unserved areas. The National Financial Inclusion Strategy identified agent banking as an important channel for achieving the financial inclusion target.

The EFInA Financial Services Agents Survey in Nigeria is a biennial study with the primary objective to identify opportunities to drive the deployment of sustainable & pervasive agent networks and increase the uptake/usage of agent services. Data from the survey is used by a diverse range of stakeholders, including regulators, policymakers, financial services providers etc. to understand first-hand ways to drive the deployment of widespread agent networks and increase the usage/uptake of agent services in Nigeria.

The survey aims to:

  • Understand and highlight the operational determinants of a sustainable financial services agent network, including diversity of products offered; types, frequency, volume and value of transactions; type of provider; liquidity management in terms of ease, cost and source of float; compliance with consumer protection measures
  • Identify factors driving the uptake of or hampering agent services in Nigeria, including customer product preference, preferred access channels, agent branding, interconnectivity and technology issues, fraud and engagement with law enforcement, cost, and agent churn
  • Identify agents’ motivation including personal interests, commissions, satisfaction with principal etc.
  • Understand the prevailing agent pricing model, including what agents are charging, price determination mechanism, compliance with price regulation, the effect of incentive on price etc.
  • Capture agent perceptions on how to increase the uptake and usage of agent services, including agent expectations from the providers, regulators, and the government; addressing complaint resolution, fraud, and law enforcement; capacity and awareness gaps etc.

Financial Services Agents Survey 2020 Report

Impact of COVID-19 on Financial Service Agents

Lapsed Financial Services Agent Survey Report_Jan2020

Key Considerations for Optimal Payment Service Banks (PSBs) in Nigeria

EFInA completed a study in January 2020 to analyse the readiness of the Nigerian financial ecosystem for the implementation of Payment Service Banks (PSBs) in comparison to India’s experience and to draw insights on the circumstances that may impact the implementation of PSBs. Furthermore, the study defines the key criteria that a hypothetical PSB would need to meet to be successful within the Nigeria financial services sector. The major findings from the research are:

  • PSBs hold great potential to advance financial inclusion, especially if able to demonstrate essential inherent strengths: large amounts of capital, strong brand presence, technological advancement, market presence, effective marketing and communication strategies, and ability to scale, among others
  • The success of PSBs is hinged on the identification of a viable business case for all stakeholders in the ecosystem. However, all stakeholders must exhibit full commitment towards the creation of an enabling environment, not just for PSBs but also for other traditional financial players. Collaborations and partnerships among stakeholders are essential to drive PSB sustainability
  • Key determinants for the successful implementation of PSBs in Nigeria include the presence of physical and reliable ICT infrastructure; development of appropriate and cheap products; harmonisation of similar regulations & proactive approach to formulating regulations; attractive agent and Customer value proposition & management; integration of various ID databases and a  balanced collaborative environment
  • Lessons learned from the Indian experience revealed that issues such as high capital requirements; restricted regulatory support; low business acceptability by the target market; lack of well-trained and effectively monitored agent network; weak customer value proposition and inability to identify and recruit experienced skill sets that drive the business operations affects the profitability and sustainability of the PSBs. Hence, the reason only one PSB (out of five) has been able to report profit since launch in 2017
  • Every PSB will need to incur high initial fixed investments costs to set up its operational infrastructure. However, for success, the PSB should be able to utilise its existing business assets to manage most of the fixed costs

EFInA Payment Service Banks-Key lessons learnt report

Key Considerations for Optimal Payment Service Banks (PSBs) in Nigeria

Women’s Financial Inclusion in Nigeria(Presentation) - May 9, 2019

EFInA’s CEO presented findings from the Access to Financial Services in Nigeria 2018 Survey at a round table discussion organised by CBN, FIS and Women world banking on the 9th of May,  2019. Highlighting perspectives from the A2F 2018 survey on women’s financial inclusion

Focus /objective :

  • 41 percent of women (aged 18 and above) in Nigeria are financially excluded.
  • Of the financially included women, about half own bank accounts and a quarter rely on informal financial services only.
  • The relative lower income and education for women are reflected in the financial inclusion gender gap as women are more financially excluded than men and are more likely to rely exclusively on informal financial services.
  • Nearly half of Nigerian women experience shocks – predominantly health-related, leading to unexpected expenses and making it difficult to meet their needs. However, only one percent of women are insured, one-quarter of those experiencing shocks rely on their very limited savings, and one-third have to cut down on expenses to cope with shocks.
  • Interventions that address the relatively low income, low education and high employment among women, and adopt a gender lens in the design of gender-centric products are needed to move the needle for greater financial inclusion of women.
  • Similarly, wide female access to mobile phones, and the willingness of women to learn new techniques for managing their finances, use mobile money and microinsurance presents an opportunity for increasing uptake of financial services among women.
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Financial Inclusion of Women in Nigeria (1)

EFInA Financial Services Agents Survey Dissemination Webinar

EFInA hosted it’s third Financial Services Agent Survey dissemination event virtually on Wednesday, June 17, 2020. The previous two Financial Services Agents survey were held in 2015 and 2017 respectively and it became clear from the findings of this year’s survey that agent banking has evolved and the dynamics are changing. The 2020 survey featured a more robust sample size of 1618 financial service agents that were randomly selected based on the proportion of agents per region and provider type.

During his presentation, the Programme Specialist, Agent Networks at EFInA, Henry Chukwu noted that the findings of the survey revealed that failed transactions and issues with provider platforms are the top challenges faced by agents. More than half of the agents interviewed were relatively new to the business (6 months up to 1 year) and requested hand-holding from principals to solve some of the challenges faced. Other aspects of the presentation revealed information on Business Operations Dynamics, Agent Pricing & Economics, Float Management as well as Support Received from Providers.

The presentation also featured information from the survey EFInA conducted on the Impact of Covid-19 on Agents’ Operation to understand the impact of the pandemic on agents’ business. The findings showed that the agents are not adequately supported by their providers/principals. Only 8% claimed to have received support from Financial Service Providers (FSPs) since the pandemic began. In addition, 80% of the agents surveyed reported that their businesses have been negatively impacted by the pandemic. However, despite bad business conditions and little or no support received from principals, the agents reported that they are still willing to render support beyond their primary business to aid the fight against the spread.

At the event, there was a panel session involving Mrs. Ronke Kuye, CEO of SANEF, Mr. Emmanuel Agha, CEO of Innovectives, Mr. Jude Anele, Group Head, Retail Banking, UBA and Jacqueline Jumah, Head of DFS at EFInA. The panel discussions were centred around the decline observed in the percentage of account opening by agents compared to previous years, the high percentage of profitable standalone agents which is contrary to the CBN guide on Agent Banking and other outliers noticed from the survey. Participants at the event also contributed to the discussions and interesting insights around the survey findings were highlighted during the panel session.

The event was attended by over 150 participants including regulators, operators, super agents, mobile money operators and persons who are interested in learning about Agent Banking. Ashley Immanuel, Head of Programmes at EFInA launched the brochure on Frequently Asked Questions (FAQs) on Agent Banking which was produced by EFInA to support the industry in creating more awareness about agent banking and to close the knowledge bank that exists around agent banking. On that note, Ashley gave the closing remarks and ended the meeting.

Financial Services Agents Survey Presentation

Financial Services Agent Frequently Asked Questions

Financial Inclusion in North West Nigeria - April 23 - 2019

 Highlights of the A2F on NorthWest Nigeria

  • Financial Access
    • There are nearly 12 million financially excluded adults living in rural areas in the North West
  • Savings
    • 41% of adults in the North West are saving money
    • Of those, about half are only saving at home, and not using any formal or informal savings channels
  • Credit
    • 27% of adults in the North West are borrowing money
    • Most borrow from family/friends
    • Across all geopolitical zones, very few adults are borrowing from formal sources
  • Digital Payments
    • When the concept has been explained, adults in the North West are more likely than those in the South to express interest in mobile money
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Financial Inclusion in North West Nigeria

Financial Inclusion in North East Nigeria - May 23, 2019

Highlights of the A2F on NorthEast Nigeria

Financial Access

  • There are nearly 6 million financially excluded adults living in rural areas in the North East
  • Savings
    • 40% of adults in the North East are saving money and Less than half of those saving are using formal channels such as banks
  • Credit
    • 44% of adults in the North East are borrowing money
    • Most borrow from family/friends
  • Digital Payments
    • Aide from the North West, adults in the North East are less likely than those in other zones to have made a digital payment in the past year
    • When the concept has been explained, adults in the Northern zones are more likely than those in the South to express interest in mobile money
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Financial Inclusion in North East Nigeria

Pensions and Financial Inclusion - March 14, 2019

EFInA’s CEO presented findings from the Access to Financial Services in Nigeria 2018 Survey to stakeholders from the Pension Sector at the Financial Inclusion Secretariat stakeholders forum on March 14, 2019.

Highlighting perspectives from the A2F 2018 survey on Retirement Savings


Focus /objective :

  • Of those not making regular retirement savings, nearly half cite irregular income as a reason.
  • Just over half of Nigerian adults are putting money aside, mostly for emergencies
  • 55 million adults (55% of adults) are saving or putting money aside, down from 66 million in 2016
  • 16 million adults save at home or carry their savings with them
  • In-kind savings (investments) remain a significant form of savings; even for those who do not put money aside.
  • Most adults under the age of 55 plan to rely on savings or their children when they are old
  • 13% of adults under the age of 55 have not made financial plans for old age
  • Only 1% of adults under the age of 55 plan to primarily rely on a pension in old age
  • This indicates that pension products with flexible contribution timing could be useful in reaching those without pensions
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Pensions and Financial Inclusion (1)

Capital Markets and Financial Inclusion - March 15, 2019

EFInA’s CEO presented findings from the Access to Financial Services in Nigeria 2018 Survey to stakeholders from the capital market at the CBN Financial Inclusion Secretariat stakeholders forum on March 15, 2019.

Focus /objective :

  • 31.2 million adults in Nigeria are both saving money and making some sort of investment outside of capital markets (in land, property, agricultural inputs/livestock, or precious metals/jewellery)
  • Nearly a quarter of Nigerians in this group only use informal financial services
  • More than half live in the northern zones (North West, North East, North Central)
  • Just over half of Nigerian adults are saving or putting money aside, mostly for emergencies
  • 55 million adults (55% of adults) are saving or putting money aside, down from 66 million in 2016
  • 16 million adults save at home or carry their savings with them
  • Although in-kind savings (investments) remain a significant form of savings, less than 5 million adult Nigerians invest in the capital market.
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Capital Markets and Financial Inclusion

How Deposit Money Banks Can Drive Financial Inclusion - March 2019

EFInA’s CEO presented findings from the Access to Financial Services in Nigeria 2018 Survey to stakeholders from the banking sector at the CBN Financial Inclusion Secretariat stakeholders forum on March 11, 2019.

Focus /objective :

  • While the number of banked adults has steadily increased since 2008, the use of banks for borrowing and payments has remained low compared to the common savings and remittances.
  • Although 31% of banked Nigerians are borrowing money, most are not borrowing from banks
  • Use of bank agents has grown slightly but remains low
  • Nigerians mostly use bank agents for reasons of convenience
  • 98% of banked adults either own a mobile phone or use a mobile phone that belongs to someone else
  • Almost all banked adults, and the majority of unbanked adults, own or use a mobile phone
  • Both banked and unbanked express some interest in learning new technology and using mobile money
  • Unbanked Nigerians think banks are not for them
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How Deposit Money Banks Can Drive Financial Inclusion (1)

Scoping study on informal savings in Lagos - March 2010

Financial institutions have long recognized the importance of savings. For the nation’s economy as a whole, collecting large numbers of small-balance deposits produces pools of capital that can be efficiently invested, which is the heart of financial intermediation. The financial services sector also can derive substantial benefits from mobilizing deposits. Access to a potentially inexpensive and stable source of funds is a major benefit.

Most importantly, well-designed deposit services can enable poor people to take charge of their financial lives. Savings can provide a cushion against economic shocks, enabling poor households to reduce financial vulnerability. Evidence from all over the world suggests that the poor want to save, and indeed are saving in a wide variety of ways. In addition to traditional ways of saving “in-kind”, the poor have created an extraordinary variety of their own systems for saving money: Esusu (peripatetic) savings collectors, reciprocal arrangements between family, friends and neighbours, marriage and funeral funds, annual savings clubs, Revolving Savings and Credit Associations (ROSCAs), Accumulating Savings and Credit Associations (ASCAs), credit unions, etc. These informal savings options, however, do not offer security of funds, ready access, liquidity or positive real return.

Understanding the degree to which different obstacles limit the development of quality pro-poor deposit facilities in Nigeria is crucial to designing appropriate policy and programmatic interventions. Therefore, EFInA has undertaken a comprehensive scoping study of the market for informal savings services in Nigeria using Lagos as a pilot. The objectives of the study were to identify:

  • The demand and supply of informal savings services accessible to low-income consumers in Nigeria
  • Explore the factors shaping demand and supply
  • Challenges and opportunities for increasing access to formal sector deposit services for the lower income segment
  • What formal financial institutions can learn from the informal savings sector and how those lessons could be applied to product and market development
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Scoping study on payment services in Nigeria: demand & supply side - August 2010

The poor need to conduct a host of financial transactions, which are mostly cash based. In addition, they use a variety of informal channels such as friends or family members; recharge cards; and taxi/bus drivers for receiving/transferring money.

The formal financial services footprint in Nigeria remains limited. The infrastructure required has not kept pace with the transaction needs of the population. Despite aggressive growth strategies by some of the deposit money banks, including branch roll-out, the majority of Nigerians remain outside the formal financial sector and the cash economy is still dominant.

In order to attract the low income population, financial providers must ensure that service points for conducting transactions are within easy reach of such customers. Given the cost of extending branch networks, financial institutions are now seeking branchless banking solutions such as partnerships with post offices or retail stores; or using mobile phone technology. The EFInA Access to Financial Services in Nigeria 2008 survey showed that:

  • Of the 18 million adults that were banked, 80% of them used public transport to get to a bank branch
  • Only 14% of adults live within close proximity of a post office
  • More than 50% of adults have access to a mobile phone, which implies that there is a huge opportunity for using mobile phones to extend financial services in Nigeria, especially to the low income population

The payments infrastructure of a country provides the foundation for the delivery of formal financial services. EFInA therefore decided to undertake a comprehensive scoping study of the payment services market in Nigeria to identify:

  • The demand and supply of payment services in Nigeria
  • The potential new business models that can be adopted to  significantly expand payment services in Nigeria
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Overview of housing finance in Nigeria - August 2010

There is a gap in the data published on housing finance in African countries. In an effort to fill this gap, the FinMark Trust has commissioned a series of studies that outline the nature and character of the housing finance sector in different countries in Africa. The objective of the study is to document the current status of housing finance in the selected countries, and recommend areas for intervention to support the broadening and deepening of housing finance markets in Africa. EFInA partnered with FinMark Trust to conduct a housing finance sector study for Nigeria. The study covered:

  • Current status of housing finance in Nigeria
  • Demand for housing finance
  • Supply of housing finance including the range of organizations involved, the parameters by which they operate, and models of financing
  • Access to housing finance
  • Policy and regulatory environment including legal and political factors and implications in developing and growing the sector
  • Key issues relating to enhancing access to housing finance by low income earners
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Financial services landscape in Nigeria - September 2010

The vast majority of Nigerians do not have access to basic banking services, which limits the ability of banks to mobilize deposits and consequently impacts investments in the real economy.

EFInA has undertaken research and analysis on the supply of financial services in Nigeria. The objective of the survey was to establish the extent to which Nigeria’s financial market is inclusive, i.e., serves the majority of Nigerians and in particular low income households. Access to a range of affordable, safe and reliable financial product and services– such as savings accounts, credit insurance and transfer services – provide the necessary lubricant for economic growth. Increased financial service access will lead to wealth creation in Nigeria.

The survey seeks to document Nigeria’s financial infrastructure, to establish levels of financial access and usage from a supply perspective and to provide the necessary context within which the levels and trends in access to these services can be evaluated. The aim of the supply side survey is not to provide a comprehensive overview of the market in its entirety but rather to consider the state of supply of and demand for financial services in Nigeria from the perspective of access and financial inclusion. In summary, the supply side survey:

  • Provides a comprehensive analysis of Nigeria’s financial sector (including microfinance)
  • Identifies potential barriers to increasing levels of financial inclusion
  • Makes recommendations for policy makers and financial services providers as to how financial inclusion in Nigeria can be enhanced
  • Identifies the gaps in the supply of products more suited to low income earners
  • Assesses the extent to which the financial infrastructure ensures the development of a more inclusive financial sector
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Understanding the low income population in Nigeria - March 2011

Access to a range of affordable, safe and reliable financial services i.e. credit, savings, investments, insurance, and transfer services) provide the necessary lubricant for economic growth and will contribute to reducing poverty in Nigeria. Readily accessible and affordable formal savings services will help smoothen out consumption, and offer a buffer in family events/emergencies that typically plunge poor people into chronic poverty or tip those on the edge into poverty.

EFInA has undertaken qualitative research to deepen our understanding of the low income population in Nigeria, especially their savings habits, challenges faced when using banks and the potential for using mobile phones to manage their finances. The broad objective of the research was to better understand the characteristics of the low income population in Nigeria, so as to encourage financial institutions to provide appropriate and affordable financial products (especially savings products) that best suit their needs. The research covered the following:

  • The role of savings in their lives
  • The types of savings products they currently use
  • Advantages/disadvantages of using formal/informal savings products
  • Challenges faced when using banks
  • What financial institutions can do to attract their patronage
  • The potential for using mobile phones to manage their finances
  • Which organizations they would trust for providing mobile financial services
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Exploring the Nigerian Insurance Market: using the EFInA Access to Financial Services in Nigeria 2010

The Nigerian insurance market, like that of so many other countries around the world, has a long way to go in serving the needs of the ordinary people. Indeed, insurance is currently still very much for the elite and the formally employed. Despite third party vehicle insurance and group life insurance (for those employees whose companies have a pension plan) being compulsory, less than 1% of adults have insurance. The focus in recent years has been on microfinance, banking the unbanked, branchless banking and mobile payments, however there is a growing emphasis internationally on microinsurance and the role it can play in expanding the insurance sector.

Microinsurance is defined by the International Association of Insurance Supervisors (IAIS) and international Microinsurance Network (MIN) Joint Working Group on Microinsurance (2007) as “insurance accessed by the low-income market”. This means that it is provided according to generally accepted insurance practices. Hence it is not social welfare or social assistance, but a complementary market solution. For microinsurance to be accessed by the low-income market, it needs to be affordable and appropriate to the target market’s needs and within convenient reach of them. Furthermore, it requires innovative approaches to distribution so as to cost-effectively reach masses of people that may not be formally employed or have a bank account. As such, microinsurance is not just a scaled down version of regular insurance; the product and processes need to be completely reengineered to meet the characteristics and preferences of the low-income market.

Is microinsurance viable in Nigeria? What is the current reach of the market and what is the potential for expanding the client base? What are the challenges and where will the first-mover opportunities be? The Exploring the Nigerian Insurance Market report, sets out to answer these questions by using the insights provided by the EFInA Access to Finance in Nigeria 2010 survey. The report:

  • Provides an overview of the Nigerian environment – in terms of the population profile and the general economic context
  • Outlines current insurance usage and the profile of those with insurance
  • Summarises why insurance penetration is so low, the risk experienced and coping strategies employed by the unserved market, and the potential channels for reaching the unserved market
  • Highlights the opportunities for expanding the reach of the insurance market in Nigeria
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Agent banking study - October 2011

The EFInA Access to Financial Services in Nigeria 2010 survey revealed that only 30% of the adult population has a bank account. From the demand side, one of the key barriers to access finance is the distance to the bank. On the supply side, one of the key constraints is the sheer costs of building and maintaining branch networks in order to reach the low income population, especially those in rural areas. To achieve universal access, banks will need to adopt their systems to a low-value, high-volume transactional environment and build more flexible, scalable points of services, where people can conveniently pay into or cash out from their transactional accounts. Technology can enable banks and their customers to interact remotely in a trusted way through existing local retail outlets. Customers can be issued bank cards with appropriate PIN based or biometric security features and the local store – the “banking agent” – can be equipped with a point-of-sale (POS) device controlled by and connected to the bank using a phone line or wireless/satellite technology. Infrastructure requirements can be further reduced by using mobile phones to hold “virtual wallets” and as a POS device at the store. Typically, agents benefit from additional revenue from commissions generated from customer transactions and increased footfall in their outlets. Currently, there are no agent banking regulations in Nigeria. Therefore, in order to make recommendations to the Central Bank on the key elements that should be adopted in the regulatory framework for agent banking in Nigeria, EFInA undertook a desk study that evaluated agent banking models in Columbia, Brazil, Peru, Kenya and India. The study also assessed the impact of agent banking on promoting financial inclusion in these countries and provided suggestions on the most effective way to develop an agent banking network in Nigeria.

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Review of government interventions that promote access to credit for Micro, Small and Medium Enterprises (MSMEs) in Nigeria – Mar 2012

Micro, Small and Medium Enterprises (MSMEs) play an important role in any emerging economy by creating employment opportunities and reducing poverty. The EFInA Access to Financial Services in Nigeria 2010 survey revealed that 38.1 million adults are self employed, of which 19.6 million adults (51.1% of those that are self employed) are the main income earners in their household. However, the MSME sector in Nigeria remains fragile and fragmented and many businesses operate in an environment that presents considerable challenges.

As is the case worldwide, MSMEs struggle with a number of growth barriers and the one most commonly cited is the inability to successfully access credit. Despite a large and rapidly growing economy with a competitive banking sector, lending to the sector is extremely low, with less than 10% of MSMEs receiving a loan from a Deposit Money Bank (DMB); and MSME loans accounting for approximately 5% of DMBs’ total lending portfolios.

Consequently, the Nigerian government has launched a number of interventions such as the Small and Medium Enterprise Credit Guarantee Scheme (SMECGS), the Agricultural Credit Guarantee Scheme Fund (ACGSF) and the National Economic Reconstruction Fund (NERFUND) to promote access to credit for the MSME sector.

In order to support the development of the MSME sector, EFInA commissioned research to:

  1. Identify the challenges that financial institutions (especially deposit money banks) face in providing finance to MSMEs
  2. Review current and past government interventions aimed at increasing access to credit  for MSMEs
  3. Assess the impact of these interventions in increasing access to credit for MSMEs

The output of the research will primarily be used to make recommendations to regulators/policy makers as to which interventions are best suited to effectively support and promote access to credit for MSMEs in Nigeria.

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Understanding co-operatives in Nigeria – April 2012

The EFInA Access to Financial Services in Nigeria 2010 survey revealed that:

  • Almost 30.0% of Nigerian adults use informal societies
  • For 17.4% (14.8million) of the adult population, informal societies provide their only means of access to finance
  • 2 million adults accessed a loan from informal societies, which include co-operatives

Co-operatives are businesses owned and run by and for their members, to meet specific economic goals.  It is estimated that there are over 80,000 registered co-operatives in Nigeria.  However, there is little systematic data on the co-operative sector, which hampers financial institutions from effectively engaging with the sector and makes it difficult to determine the optimal strategy for delivering relevant products. If managed properly, the co-operative sector could significantly contribute to expanding opportunities in rural communities, especially for farmers, women and micro-entrepreneurs throughout Nigeria. By undertaking an in-depth study of the sector, EFInA intends to improve the financial sector’s understanding of the co-operative sector and its potential for enhancing financial inclusion in Nigeria. The primary objective of the research is to provide comprehensive analysis on co-operatives in Oyo, Kebbi and Enugu (these 3 States offer a variety of co-operatives), in order to understand their operations, sources of funding, governance, internal capacity, members’ needs, growth prospects and challenges. The report will provide evidence-based information that will enable policymakers and financial service providers to develop a strategy to unlock the potential for the expanding financial services to co-operatives in Nigeria. The qualitative report is a pre-cursor to the quantitative phase, which is due to be completed in September 2012. It is therefore fitting that with the UN declaring 2012 as the “International Year of Co-operatives” that renewed focus is being paid to the sector.

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What does the CBN’s Cash-less policy mean for financial inclusion in Nigeria?

Increasing numbers of countries have adopted policies to accelerate the use of electronic channels and reduce the use of cash. The motivations for these policies vary: many are primarily concerned with reducing tax evasion, some with fighting crime, and a few are now explicitly linked to financial inclusion – though the latter link is not necessarily immediately nor automatically achieved. In Nigeria, the Central Bank of Nigeria (CBN) announced its Cash-less policy in 2011 and commenced a pilot of the policy in Lagos State in April 2012. The policy, intended to reduce the use of cash, is in fact a package of measures, with three key stated objectives:

  1. To drive the development and modernisation of the payment system in line with Vision 2020.
  2. To reduce the cost of banking services and drive financial inclusion by providing more efficient transaction options and greater reach.
  3. To improve the effectiveness of monetary policy in managing inflation and driving economic growth.

Financial inclusion is thus a distinct component of the CBN’s second Cash-less policy objective, in conjunction with reducing banks’ cost to serve. So, how is the Cash-less policy relevant for financial inclusion in Nigeria; and how can its effect on financial inclusion be maximised? This report sets out the context of financial inclusion in Nigeria and considers evidence of the link between other countries’ approaches to reducing the use of cash and financial inclusion to answer these questions.

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Agent banking in Nigeria: factors that would motivate merchants to engage – September 2013

In countries across the globe, banks are increasingly using agents to provide financial services to customers, especially for the low income segment. In February 2013, the Central Bank of Nigeria (CBN) released the “Guidelines for the Regulation of Agent Banking and Agent Banking Relationships in Nigeria” as a part of its effort to deepen financial inclusion in Nigeria. In August 2013, the CBN released a circular to provide guidance on the approval process for financial institutions wishing to deploy agent banking services in Nigeria. To support the successful development of pervasive agent networks for the provision of financial services, EFInA commissioned a research study on “Agent banking in Nigeria: factors that would motivate merchants to engage.” The study provides relevant insights on pre-existing relationships between merchants and their customers; merchants’ expectations for undertaking agent banking services; key barriers to merchants adopting agent banking; customers’ perceptions of agent banking; and factors that will drive the adoption of agent banking in Nigeria. The findings from the study will provide input for deposit taking financial institutions to determine the viability of deploying an agent banking network as well as to develop their go-to-market agent banking strategy including the customer target, resourcing requirements and target agents.

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Incorporating the informal sector in Nigeria into the Contributory Pension Scheme (CPS) – December 2013

The National Financial Inclusion Strategy for Nigeria identified pension offerings as a key financial product that will enhance the objective of reducing financial exclusion. To date, pension reforms in Nigeria have mainly focused on the public and formal private sectors, with limited participation from workers in the informal sector. Recognising the need to provide pension products to the informal sector, Enhancing Financial Innovation & Access (EFInA) in partnership with the National Pension Commission (PenCom), commissioned a qualitative study to understand how to incorporate the informal sector in Nigeria into the Contributory Pension Scheme (CPS). The study was conducted through Focus Group Discussions (FGDs) with 253 informal sector workers and current pensioners. The FGDs were held across five states in Nigeria (Enugu, Oyo, Kano, Lagos, and Rivers) and the Federal Capital Territory (FCT), in both urban and rural locations. The study explored the following topics:

  • Current savings habits: Understanding the current saving habits of workers in the informal sector, including long-term savings approaches
  • Current use of financial products: Understanding the level of use of pensions and other formal financial products
  • Awareness about pensions: Documenting the level of awareness/understanding of pensions and customers’ perceptions of the perceived benefits and disadvantages of having a pension
  • Motivating factors: Ascertaining what would motivate informal sector workers to participate in a pension scheme
  • Challenges and incentives: Identifying obstacles that may prevent the successful implementation of pensions for the informal sector, and how best to address these obstacles, including potential incentives
  • Channel for receiving payments: Defining the appropriate channel(s) that the informal sector could use to make/receive pension payments
  • Communication channels: Highlighting potential approaches to educate the informal sector about pension products
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Assessing the impact of financial inclusion policies on deepening financial inclusion in Nigeria: Supply side perspectives – Nov 2014

The Government of Nigeria, especially the Central Bank of Nigeria, has developed and implemented a variety of policies to spur greater financial inclusion. In July 2014, EFInA commissioned Dalberg Global Development Advisors to undertake an impact assessment to explore how effective these policies have been in creating an enabling environment for financial inclusion in Nigeria. There was a specific focus on: (1) the strategic role of financial inclusion within the stakeholder’s organisation; (2) the awareness of relevant policies within the stakeholder’s organisation; and (3) the stakeholder’s level of satisfaction with these policies and suggestions for improvements. This research was conducted via interviews with various supply-side stakeholders, including Deposit Money Banks, Microfinance Banks, Mobile Money Operators, Mobile Network Operators, Agent Network Aggregators, Switch Companies, Card Issuance Companies and Industry Associations. A total of 53 interviews were conducted. The policies that were assessed are:

  • Regulatory Framework for Mobile Payments Services (2009)
  • Revised Microfinance Policy Framework for Nigeria (2011)
  • Guidelines on Non-Interest Window and Branch Operations of Conventional Banks and Other Financial Institutions (2011)
  • Cash-less Policy (2012)/Guidelines of POS and Card Acceptance Services (2011)
  • National Financial Literacy Framework (2012)
  • National Financial Inclusion Strategy (2012)
  • Tiered KYC Regime (2013)
  • Guidelines for the Regulation of Agent Banking and Agent Banking Relations (2013)
  • Revised Guide to Bank Charges (2013)

The study found that the policies have generally been effective in creating an enabling environment for financial inclusion in Nigeria. The report also highlights opportunities for policy reforms that could serve to further promote financial inclusion in Nigeria.

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The landscape of financial inclusion and microfinance in Nigeria – March 2015

The vision of the Central Bank of Nigeria (CBN) is to have an effective and sustainable microfinance sub-sector that provides access to a range of financial and non-financial services to low income earners and vulnerable groups. The proposed target for microfinance bank branches as stated in the National Financial Inclusion Strategy is that by 2020, there should be 5 branches per 100,000 adults. The CBN revised the Microfinance Framework for Nigeria in 2011. According to the EFInA Access to Financial Services in Nigeria 2014 survey, awareness and usage of microfinance banks is still relatively low, only 2.6 million adults (2.8% of total adults) have a microfinance bank account. This report also covers:

  • Reasons for not using microfinance banks
  • Factors that will encourage usage of microfinance banks by non-users
  • Factors that will encourage re-engagement with microfinance banks by previous users
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Key Findings from Focus Group Discussions with Users and Non-Users of Mobile Money – December 2015

The EFInA Access to Financial Services in Nigeria 2014 survey found that, although 11.9 million adults (12.7% of the adult population) were aware of mobile money, only 0.8 million adults (0.8% of the adult population) said that they were currently using mobile money services. As a precursor to the EFInA Access to Financial Services in Nigeria 2016 survey, and to gain further customer insights on usage/non-usage of mobile money, EFInA commissioned Focus Group Discussions (FGDs) with mobile money users as well as with non-users. The FGDs were designed to assess: (1) usage and perceptions of mobile money by users; (2) opportunities for increasing the uptake and usage of mobile money in Nigeria; and (3) incentives that could drive the sustained usage of mobile money in Nigeria. Findings from the FGDs indicate that mobile money operators can increase usage of mobile money by providing services that customers find useful, such as being able to pay for transportation using mobile money; improving quality of service; providing competitive pricing; and providing incentives for customers to use mobile money. Government/policy makers can promote mobile money by paying conditional cash transfers via mobile money and requiring that certain government payments be made via mobile money.

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Mobile Money Agent Survey – December 2015

Given the relatively low per capita availability of bank branches and other traditional financial access points in Nigeria, providing mobile money via agent networks presents a tremendous opportunity for extending financial services to un-served and under-served Nigerians. Despite this, EFInA’s Access to Financial Services in Nigeria 2014 survey found that only 2% of adults were aware of the location of their nearest mobile money agent, and less than 1% of adults had used a mobile money agent. EFInA conducted a telephone survey of 279 mobile money agents in order to: (1) identify ways to drive deployment of widespread agent networks and increase usage of mobile money services; (2) gain a better understanding of mobile money agents’ operations; the challenges they face in providing mobile money services; their motivation for becoming mobile money agents; and their perceptions of how to increase the uptake and usage of mobile money. Findings from the survey include insights about transactions processed, commission earned, float management, agent satisfaction, experience with incentives, and comparisons between the experiences of female versus male agents. The survey found that most agents were glad that they became mobile money agents and planned to continue working as agents in the future. However, findings indicate that there are specific actions that agent network managers can take to improve the effectiveness of agents and drive usage of mobile money, such as engaging agents when conducting awareness campaigns, improving the customer experience by training agents to provide useful, high-quality customer support when issues are encountered, and designing approaches to specifically support and retain female agents.

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EFInA Super Agents Scoping Study

The success of agent banking is dependent on many factors, but significant among them is agent management. A well-managed agent network can help providers build brand awareness, educate customers and meet system-wide liquidity demands, all of which build confidence among users in a service that has low awareness. A poorly managed agent network, by contrast, is characterised by widespread low quality customer experiences, which in turn erodes trust and drives away business. In 2015, the Central Bank of Nigeria (CBN) recognised and acknowledged the role played by agent network managers by releasing the Regulatory Framework for Licensing Super Agents in Nigeria, so as to strengthen agent networks. This EFInA Super Agent study seeks to analyse and evaluate Nigeria’s Super Agent model in comparison with successful models in other markets, with an aim to apply relevant lessons in Nigeria. The recommendations in this document are useful for regulators, financial services providers and Super Agents to deepen agent banking in Nigeria.

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Agent Pricing Across Different Landscapes

Among the several challenges hindering the development of agent networks in Nigeria, high pricing of agent services is a key barrier to the use of financial services. This survey highlights the applicable agent pricing models in various landscapes and provide recommendations to the Nigerian policy makers on the agent services pricing model.

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Factors and Trends Impacting the Building and Scaling of Agent Networks in Nigeria

In emerging markets, Agent Networks continue to be crucial assets for Digital Financial Service (DFS) providers and have been key to the growth of the industry over the last decade. This study illustrates the slow spate of Agent Networks development along with external factors (price regulation) and institutional factors (strategic issues & operational issues) identified as responsible.

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Financial Services Agents Survey

EFInA Financial Services Agent survey 2017 identifies opportunities to drive the deployment of sustainable & pervasive agent networks and increase the usage/uptake of agent services. The survey provides insight to:

  • Financial services agents’ operations
  • Factors driving the  agent services
  • Agents’ motivation
  • The extent of agent services’ utilisation
  • Factors hindering the growth and development of agent networks in Nigeria
  • Information to financial services providers about agent transactions and customer preferences
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Factors that may encourage the Financially Excluded to use Mobile Money - Sept 2018

EFInA conducted a survey in September 2018 to understand the population of adults who do not have access to any financial service (formal or informal) in Nigeria, their savings and credit patterns, remittances behaviours, payment channels and their potential to use formal financial services to manage their finances. The main key findings of the survey were:

  • The financially excluded desire ease of use, convenience and accessibility when looking out for savings channel
  • Majority save for emergencies and day to day needs (69.9%), with others saving to buy farming input and meet personal needs (11.1%)
  • Perceived usefulness affects the demand and adoption of mobile money
  • Low income people have low purchasing power and are price sensitive
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Scoping Study on Fraud Management in Electronic Payments - May 2018

EFInA conducted a survey in May 2018 to focus on fraud in electronic payments channels, especially mobile money because this is largely becoming  appealing to fraudsters. The survey aimed at providing relevant information on fraud in electronic payments; understanding fraud detection and mitigation mechanisms in electronic payments.

The main key findings of the survey were:

  • Some of the key obstacles affecting the uptake of mobile money in Nigeria include low awareness, access and trust. The trust element has further been identified as fraud, stability of technology infrastructures in terms of regular availability/low downtime of the platforms and Improved customer experience
  • In recent times, electronic payments financial services providers are constantly faced with a growing threat of fraud which is becoming more complex and sophisticated in Nigeria and other emerging markets
  • In 2016, about 67% of all electronic payment frauds in Nigeria happened through digital channels while 33% happened over the counter
  • To effectively mitigate electronic payment fraud across electronic channels especially mobile money, financial services providers need to establish effective controls to detect and prevent these risks
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Improving Digitised Microcredit in Nigeria - A Use Case for Credit Bureau and Collateral Registry - August 2018

EFInA conducted a research in August 2018 titled “Use of Digital Microcredit in Enhancing Financial Inclusion in Nigeria”. The major findings from the research were:

  • Lending to the un(der) served low income households is challenging due to little or no financial knowledge as most of these  persons  have  limited  understanding of  formal financial services, which  inhibits  their  ability to make good decisions about credit.
  • Nigeria  presents  a  huge  market  for  digitised  unsecured  loans;  the  EFInA  Access  to  Financial  Services  in Nigeria 2016 survey revealed that of the 96.4 million adults (people aged 18 and older) in Nigeria, 40.1 million (41.6%)  are financially excluded, meaning that  they do not have access to any financial product or  service,  from  formal  financial  services  providers such  as  banks  or  even  informal  providers  such  as cooperatives or savings clubs
  • Digital credit is a fast-growing phenomenon in many emerging markets. “Digital credit” refers to credit products including digital payments products such as mobile money that are delivered fully via digital channels, such as mobile phones and the internet
  • Microlenders need to rely on the Credit Bureaus and the Collateral Registry when developing credible credit scoring tools
  • Adopting  digitised  micro  lending  methodology  offers  several  important advantages  such  as  lower operating  expenses  and  faster  turnaround  time,  lower  delinquency  due  to  better  decision making, improved understanding of client  behaviour, and enhanced customer engagement  through personalised products
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Overview of the Microinsurance Ecosystem in Nigeria

EFInA conducted a research titled “Overview of the Microinsurance Ecosystem in Nigeria”. The major findings from the research were:

  • Microinsurance in Nigeria is at a very early but growing phase. An in-depth review of key findings of the EFInA Access to Financial Services in Nigeria 2016 Survey shows that while uptake is currently low, 32.1 million adults will be interested in using Microinsurance
  • The key drivers of Microinsurance to reduce the vulnerability of low-income earners include an appropriate cover, simple and easily understood products, manageable premiums, suitable delivery channels and convenient premium collection methods
  • Distribution is a particularly important focus for those looking to deliver insurance to low-income people. With low margins, microinsurers need to find low-cost channels that can reach clients in large numbers. The channels also need to be capable of selling to those with no experience of insurance


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Microinsurance Assessment and Landscape Study in Nigeria - December 2018

EFInA conducted a survey in December 2018 to provide a status update on the progress of Microinsurance and facilitate the stakeholders around key financial inclusion programs and regulations that will expand the market. The major findings from the research were:

  • 2.2 million lives (~1.2% of total population) covered by MI in 2017
  • Credit-linked coverage through microfinance banks account for 84% of the lives covered
  • 44% of the products in the study were “bundled” products combining 2 or more types of insurance
  • Nigeria lacks wide variety of distribution channels seen in other countries that offer MI
  • Distribution is concentrated in financial institutions as well as agents and brokers
  • Mobile network operators are a key distribution channel that is missing in Nigeria
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