The Path to Inclusion is Mobile: An Interview with Ibukun Awosika
It may be a slow process, but financial inclusion in Africa is improving. Given the barriers formal banking faces on the Continent, including practical issues such as dispersed populations, and regional variations in infrastructure, it is unsurprising that this is not an issue which will be resolved overnight. We spoke to Ibukun Awosika to find out more on First Bank Nigeria's actions on financial inclusion, her thoughts on improving access to banking services – plus the impact of mobile in Africa.
It may be a slow process, but financial inclusion in Africa is improving. Given the barriers formal banking faces on the Continent, including practical issues such as dispersed populations, and regional variations in infrastructure, it is unsurprising that this is not an issue which will be resolved overnight. As of 2014, 34% of those in Sub-Saharan Africa had a bank account – leaving approximately half a billion people in Africa unbanked.
The popularity and accessibility of the mobile money account – almost six times more utilized in Sub-Saharan Africa than anywhere else in the world – is a good sign for financial inclusion, putting many on the path toward accessing formal financial institutions. In Nigeria (in 2015), one of the biggest economies on the Continent, approximately 45% of the population did not have a debit card or access to a financial institution account.
This is figure is on the wane however, perhaps partly as a result of the efforts of one bank putting financial inclusion are the forefront of their strategy – First Bank of Nigeria. With campaigns designed to provide financial literacy early-on, as well as reaching underserved markets including young people and students, FirstBank has been committed to leveraging mobile technology in order to improve financial inclusion in Nigeria. Hoping to grow their customer base from 14.5 million accounts in 2017 to 30 million by 2021, they've also bolstered their mobile money services through their brand Firstmonie. Firstmonie agents are positioned in communities with low rates of banking penetration, allowing customers in rural locations to open accounts and access FirstBank services – with the hope that convenience and locality will fuel financial inclusion.
“Individuals and businesses are increasingly adopting digital payments and financial accounts ... unleashing large gains in productivity and investment, and prompting greater financial inclusion”
The face of these efforts is, to a great extent, FirstBank of Nigeria's Chairwoman, Ibukun Awosika. The first female chair of the bank, Ibukun Awosika has overseen the implementation of their FirstGem account, specifically designed for women and female entrepreneurs. At FirstGem's first anniversary at the end of last year, she announced “we will not stop until every Nigerian girl-child has found their voice and found their pocket.” Embracing the new possibilities of mobile tech, FirstGem not only supports women entrepreneurs through training and research, but fosters relationships through its provision of a virtual community for its users.
Ibukun Awosika, Chairman, Board of Directors, First Bank of Nigeria Limited
We spoke to Ibukun Awosika to find out more on First Bank Nigeria's actions on financial inclusion, her thoughts on improving access to banking services – plus the impact of mobile in Africa.
In your opinion, what is the most significant issue hindering inclusive financing in Africa?
Financial services are the lifeblood of an economy, enabling households and businesses alike to save, invest, and protect themselves against risk. However, in emerging economies today, the majority of individuals and small businesses lack access to even basic savings and credit products, hindering economic growth. An estimated half a billion individuals in Africa today are financially excluded.
Success in financial inclusion entails reaching these users with products that can significantly improve financial lives. Specifically, the issues of distribution, product development, and financial inter-mediation will need to be tackled at scale. It is also important that an optimal regulatory framework exists to properly incentivize all stakeholders (banks, non-bank financial institutions, mobile network operators, agents, etc.)
The 2014 Africa Progress Report found that only one in five Africans have any form of account at a formal financial institution – how much progress do you believe has been made in the last five years?
In recent years, mobile technology has been instrumental in driving financial inclusion on the continent. In addition, disruptive new entrants continue to gain ground. Individuals and businesses are increasingly adopting digital payments and financial accounts to interact seamlessly and efficiently, unleashing large gains in productivity and investment, and prompting greater financial inclusion.
In Nigeria, the Central Bank is fine-tuning its policy around agency banking as a strategy to tackle the distribution problem. Agency Banking is expected to provide services such as cash withdrawal and deposit, bill payments, payment of salaries, funds transfer and balance inquiry through the use of mobile phones and mobile banking.
FirstBank recently launched their digital platform for women, FirstGem. What do you hope to achieve with FirstGem?
At FirstBank we recognize the importance of women in driving socio-economic growth.
The FirstGem platform includes benefits which empower women to achieve their financial goals and lifestyle aspirations. With FirstGem, our female customers – whether working class women, business owners or students, FirstGem is suitable for a broad range of women – customers enjoy a range of services, such as advisory services on wealth creation and investments and business advisory services on business funding. In addition, they have the opportunity to benefit from specialized training on business development initiatives (online and in-class), regular insights on business opportunities and openings in various sectors and industries, and discounts at merchant outlets that offer lifestyle products and services (spas, grocery stores, event centres, etc).
You're FBN's first Chairwoman - what have you found most exciting about this position?
The hope and aspiration that my appointment has kindled in many women across many generations that they can get to the top of anything they apply themselves to.
To hear more from Ibukun Awosika, join us at The Annual Debate 2018, where she will be speaking on our panel Inclusive Financing in Africa.
From 'The Rest' to 'The West': 4G Capital tackles inclusive financing in Africa
- 4G Capital fintech solutions are accelerating financial inclusion in Africa
- US $26M worth of loans disbursed to date
- Customers financial literacy grows with adoption of the service
4G Capital fintech solutions are accelerating financial inclusion in Africa
US $26M worth of loans disbursed to date
Customers financial literacy grows with adoption of the service
When the African Development Bank reported in 2013 that over 75% of people in Africa did not have access to an account at a formal financial institution, it brought the issue of inclusive financing to the fore. Whilst for many this may have appeared as a limitation – a barrier to the ease of doing business – for some big-thinkers, it was an opportunity.
The same year, 4G Capital was founded in Nairobi by Wayne Hennessy-Barrett. Offering microfinance to small businesses, 4G worked with a vision to digitizing the informal economy, and connecting African enterprises to the world. Today, the company's financial services are expanding across sub-Saharan Africa, with $26M worth of loans awarded to date.
What makes 4G Capital shine, however, is their mission to combine microfinance with both digitization and education. Alongside loans, customers receive financial education, and the stats testify to the success of this, with 94% of customers reporting increased financial literacy. Meanwhile, Hennessy-Barrett is also working to make 4G Capital smarter. Collecting data via SMS surveys, 4G Capital is reaching those excluded from formal finance – and from internet connectivity. This is not merely bringing the company insight, but when customers come to graduate to a formal financial institution, they can take their credit data with them.
“There is a great gap in the market for affordable debt financing in local currencies, which places more risk on solid enterprises than would otherwise be the case in other markets. ”
We spoke to Wayne Hennessy-Barrett to find out more about 4G Capital's impact in Africa, his thoughts on inclusive financing – and, of course, who he's most excited to hear from at The Annual Debate.
So you founded 4G Capital, a microinvestment company providing microfinance and financial education - where have 4G Capital had the biggest impact to date?
Wayne Hennessy-Barrett, Founder and CEO, 4G Capital
As one of Africa's few profitable fintechs, our greatest impact has been the transformation of wealth creation for the majority of our clients. By ensuring we only lend working capital to viable businesses, and rightsizing credit lines with affordability, we have seen a marked growth in client business size and personal economics in a significant proportion of our client base. We're now matching bottom line profit with top-line growth as we scale in earnest with partners.
An impressive feat - you also report a 94% increase in financial literacy amongst your customers. How important do you believe financial education has been to the success of 4G Capital?
We think it is fundamental to delivering the skills to use credit to grow wealth, rather than to cover immediate living costs.
In your opinion, what is the most significant issue hindering inclusive financing in Africa?
The issues which hinder our clients are the same issues which hinder businesses across Africa - access to affordable capital. There is a great gap in the market for affordable debt financing in local currencies, which places more risk on solid enterprises than would otherwise be the case in other markets.
For those who have gained access to finance via 4G Capital, 86% are achieving increased sales - what are 4G Capital hoping to achieve in the future?
We are exponentially ambitious by design. We want to digitize the informal sector across Africa, connecting the vast opportunities in the growing informal sector with global value chains. We then want to see the best in class products and technologies migrate from African markets - 'The Rest' - back to developed markets in 'The West', to help solve the same problems of social and financial exclusion which hold us back from creating the world we want for our childrens' children.
Inspiring words! Speaking of which, who amongst our speakers at this year’s Annual Debate are you most looking forward to hearing from?
Impossible question! This is a stellar group of thought leaders and experts, I'm going to learn a lot and I'm very honoured to support it. I'm most interested to see how representatives from the UK government will describe Britain's engagement strategy with business in Africa. We live in a fast-moving world, and connecting capital with expertise and execution in exponentially growing markets in no longer a luxury for the few - it's a necessity for economic development everywhere.
To hear more from Wayne Hennessy-Barrett, join us at The Annual Debate 2018, where Wayne will be speaking on our panel Inclusive Financing in Africa.
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