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Tuesday, March 28, 2023

How Zenith Bank Deepens Financial Inclusion in Nigeria

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Vice president for equity growth, finance, and institutional inclusion, at the World Bank Group (WBG) Ceyla Pazabasiogu was on point when she said there is no end to poverty without financial inclusion.

Pazabasiogu added that finance has to serve everybody, especially those  at the bottom of the pyramid.

Of course, there is a relationship between financial inclusion and economic growth as developed countries with 100 percent inclusion rate have a robust foreign exchange reserve, while their gross domestic products have been growing steadily.

Africa countries have the biggest share of financially excluded individuals, the large chunk of farmers do not have any form of bank accounts.

The financial exclusion gap can be largest attributed to lower income, illiteracy, proximity, and gender gap.

Most traders still prefer to stash their money in the backyards as they complain that the process of opening an  account is burdensome, while the distance from their homes to the financial institution is often pretty much discouraging.

In Egypt, for example, the share of people aged 15 and over with an account at a financial institution rose from 13.7 per cent in 2014 to 33 per cent in 2017. That compares with well above 90 per cent in advanced economies.

According to a 2018 report by Enhancing Financial Innovation and Access (EFIna) Nigeria’s financial inclusion rate is at 63.2 percent, meaning that as much 36.8 percent or about 40 million adults still lack access.

Nigeria has the largest number of people living in extreme poverty in the world. Nearly 50 percent of the population endures extreme poverty, the unemployment rate stands at around 23 percent 15 percent, and a significant portion of a population of 200 million people lack adequate education.

The Central Bank of Nigeria (CBN) said 80 percent of Nigeria will have access to financial services by 2020, but EFIna in a pessimistic tone warned that the Apex bank is unlikely to meet the target as the coronavirus pandemic has disrupted economic activities across the country.

As a result of the Covid-19 pandemic and sharp drop in oil price, the country slipped into a second consecutive recession in 5 years.

However, there is light at the end of the tunnel as some Nigerian lenders are at the forefront of deepening financial inclusion and reducing poverty.

In its determination to boost financial inclusion in Nigeria, Zenith Bank, the largest lender in Africa’s largest economy by total asset and profit, has strengthened its collaboration with the CBN and the Bankers Committee through various financial inclusion initiatives.

Zenith Bank, in its financial sustainability report for 2020, said it is going further by leveraging its retail banking drive to reach the unbanked.

“We ensure compliance with relevant regulations and policies aimed at promoting financial inclusion. In line with the cashless policy directive of the apex bank, the Bank has leveraged technological solutions to develop various products to ensure that the policy objectives are achieved,” said the Bank.

“Our e-banking products and channels are critical drivers of our financial inclusion strategy. We create these products and platforms to assist in reducing cost of banking and help to on-board previously unbanked members of the public, enabling them gain access to financial services through mobile devices, especially in areas where physical bank branches may be unavailable,” said the Bank

The lender has also complied with the Central Bank’s directive to lend to the real sector and participate in the various intervention funds launched by the government to target key sectors of the economy.

In the 2019 financial year, Zenith Bank  participated in the Real Sector Support Facility provided by the CBN to the tune of about ₦43 billion to support manufacturing, agricultural value chain and selected service subsectors.

To increase its reach and cater for the financial needs of the unbanked public, the Bank has taken active steps to increase its branch network.

It also introduced banking products that require minimal account opening requirements and zero balance start up.

“In addition to our “Zero account opening balance” product, we have also introduced several other products and services aimed at driving financial inclusion and on-boarding the underserved and unbanked public,” said the Bank.

“Some of these products include Zenith Children’s Account (ZECA), Aspire EazySave Classic, EazySave Premium, EazySave Plus, mobile banking, eazymoney, USSD Banking, (*966#), and so on,” said the lender.

Zenith Bank’s retail account increased by 17.78 percent to N1.0 billion in December 2018 from N849.80 million as at December 2018.Interestingly, the retail account surged by 146 percent to N2.44 billion as at December 2019.

There were 52.30 million USSD banking transactions volume in 2019, which is 76.39 percent increase from 2018’s 29.65 million. The total value of USSD stood at N497.29 million in 2019, from N380.25 million as at December 2018.

Zenith Bank has 1,935 Automated Teller Machines (ATM) as at December 2019, that compares with 1,817 in 2018. It also has 32,027 points of sales terminals across the country, which represents 94.98 percent uptick from 2018’s 16,425.

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