How YDFS bridges the financial exclusion divide in Nigeria | The Guardian Nigeria News

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According to a 2019 report from the National Bureau of Statistics, 73.2 million adults representing 41.6% of Nigeria’s adult population are financially excluded.

About one in five adults and 38 percent of households report having a formal bank account. This includes both commercial banks (34 percent of households) and other financial institutions such as microfinance institutions (MFIs), cooperative societies and savings associations. The incidence of banking operations is highest in the Southwest region with 56 percent of banking households and lowest in the Northwest region with only 16 percent of households having a formal bank account.

The issue of financial exclusion has therefore been a major economic challenge that has captured the attention of various governments over the past four decades. Prior to recent efforts to promote financial inclusion, the Nigerian economy was largely a cash-based economy with a significant proportion of the narrow money supply in the form of currency outside the banking system.

Financial inclusion is a catalyst for development, it is important to bring integrity and stability to the financial system of an economy as well as its role in the fight against poverty in a sustainable way.

High levels of financial exclusion pose major threats to economies, such as lost business growth opportunities and stunted economic growth. Without financing, people who are not connected to the formal financial system do not have the opportunity to maximize their income and grow their businesses. Also, when resources are unused in the form of money in the hands of people who are in the informal sector, it could limit a country’s economic growth potential.

The above expresses the need for a deeper agent bank if Nigeria is to meet the National Financial Inclusion Strategy (SNIF) goal.

In 2019, Y’ello Digital Financial Services (YDFS) rolled out the MoMo agent service across Nigeria to provide safe and accessible money transfer services to financially underserved communities. A subsidiary of MTN Nigeria, YDFS uses its vast network of more than 150,000 agents to provide these services to underserved and unbanked communities. Recently, the financial service provider has expanded its services to further deepen the dynamics of financial inclusion, with the MoMo agent service now providing bill payment, cash deposit and withdrawal, data purchase and payment. Airtime and wholesale disbursement services anywhere in Nigeria without a bank account.

On May 6, 2021, the European Union-funded Mercy Corps ‘Building Resilience in Complex Crisis (BRICC)’ program signed a new partnership with YDFS to efficiently deliver automated money transfers and to provide a means for program participants with or without a bank account to receive funds. This partnership will launch the use of the MoMo agent in the distribution of conditional and unconditional cash transfers to 14,270 households in the LGAs of Damaturu and Potiskum in Yobe State.

The presence of the MoMo agent in the communities where BRICC is implemented means faster and more efficient ways of delivering money transfers without participants having to wait in long lines. MoMo agents provide secure, fast and easy access to financial services for clients through their widespread presence and reliable service, with more than 150,000 agents located across the country.

This partnership with Mercy Corps provides a unique opportunity to extend these benefits to the most vulnerable families in Yobe State and other conflict-affected states in the Northeast.

Y’ello Digital Financial Services is committed to ensuring that every Nigerian can seamlessly access financial services for their personal and business needs. They do this by leveraging partnerships to support the federal government’s financial inclusion strategy. This is a step in the right direction, to complement the efforts of the Central Bank of Nigeria to close the 8.5% financial inclusion gender gap in Nigeria and achieve 95% financial inclusion in Nigeria. ‘by 2024.

An inclusive financial sector is characterized by the diversity of financial service providers, the level of competition between them, the legal and regulatory environments that guarantee integrity and access to financial services for all. Evidence around the world shows that access to financial services contributes to both economic growth and wealth creation and is therefore the key to tackling the “Nigeria poverty trap”. It is essential that regulators and policymakers create an enabling policy environment to actively promote both the demand for and the supply of financial services to the unbanked and underbanked.

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