Connect with us

Business Home

Covid-19 and Financial Inclusion in Nigeria: The Good, The Not-So-Ugly

Published

on

Onyeka Akpaida, Founder and Chief Impact Officer at Rendra Foundation

No one envisioned the world would be at a standstill for 6 weeks, much less experiencing a global pandemic; in an unprecedented manner, COVID-19 decided to show up regardless.

The economic disruption of this pandemic will largely come from ‘’aversion posture” taken by people to avoid contracting the virus. These include government-imposed lockdowns, business closures and reduction in activities by people which will inadvertently affect all sectors of the economy and translate into reduced income for suppliers, lower wages, unemployment and a lower standard of living.

Bringing it home, our 2020 fiscal budget revenue assumptions were made with a $57 per barrel benchmark; however, the crude oil price dipped as low as $20 this month.

This is worrisome to me as we have been unable to sufficiently set aside buffers against these daunting economic challenges. It is my hope that coming out of this pandemic, Nigeria is able to commence a dogged economic diversification drive.

The estimated number of financially excluded adult Nigerians as of 2018 was 36.6m and given the lockdown situation following the pandemic, many financial services providers are unable to implement planned projects in terms of onboarding customers. It is obvious that Nigeria will not be achieving her 2020 financial inclusion goal of reducing exclusion by 20% from 36.6m to 19.9m adult Nigerians.

Statistics from Global Findex also show that a lack of regular income is the major reason for financial exclusion and it is inevitable that the economic impact of the pandemic which includes loss of income particularly with adults that earn daily wages will not do us any favours in closing this gap.

This article will be addressing the impact of the pandemic on Nigeria’s financial inclusion drive and recommendations to stakeholders- fintech, social enterprisesand government on how best to mitigate and innovate in the short andmedium-term.

Although the effects of this pandemic are going to hit hard in the short and medium- term; there is ample opportunity to cushion the effects by getting the most vulnerable adult Nigerians financially included to give them access to the opportunities highlighted in the recommendation section of this article.

The Not-So-Ugly (Covid-19)

Remote Work: This is inevitable as many brick and mortar financial service providers have to swim against this tide that is in an uncharted territory. The banks are sequestered and so are the customers; financial service providers are leveraging on every office and communication tool to keep work going. You can find us in front of our computers with the webcam on having your ‘beloved’ Monday morning meeting with your line manager trying to explain why you have been unable to land that customer.

Loans & Lending: There will definitely be a surge in the requests for loan facilities to meet up to daily and expensive demand of staying at home; I can imagine most lending institutions and apps are inundated with loan requests given the ease of getting credit in less than 5 minutes. Loan default is guaranteed as some workers have been laid off, and those who earn daily wages in non-essential sectors will be unable to meet up with their repayments.

The good news is the Central Bank of Nigeria has directed that moratorium be given to credit facilities and most financial service providers have taken a consumer friendly position by providing up to 3 months moratorium to ease the burden on borrowers. The Central Bank of Nigeria has also directed that interest rates on all applicable intervention funds be reduced from 9% to 5% (be sure to check that your bank has done it.) It is also expected that lending institutions will reduce the credit limits of customers to mitigate default.

Mobile Money Usage: Following the lockdown measures and call for social distancing, most transactions will be conducted via mobile banking apps and agents to cater to under-served and peri- urban communities. According to EFINA Access to Finance 2018 Survey, Mobile money usage increased by 2.2% from 2016 and we expect these numbers to increase exponentially by the end of 2020 with the lockdown being a key catalyst.

Leveraging the use of USSD offline technology, it has become easier reaching the under-served with affordable banking services as it does not require internet usage. We expect to see growth in the Access to Finance 2020 survey statistics on mobile banking usage in the areas with previously high financial exclusion rates.

The Good (Recommendation):

Financial Inclusion Goal: The  Digital Nigeria report on financial inclusion as at January 2020 revealed that over 36 million of the 101.4 million adult Nigerians are financially excluded and if you are gender- focused like I am, it will interest you to know that about 20.5 million of the excluded population are women. There is a huge opportunity for new players in the financial inclusion space irrespective of your business location- Urban centres or rural communities and if you are passionate about under-served communities, there are over 28 million excluded people in this demography.

Reduction in barriers to entry by regulators in the financial inclusion space such as high cost of fees will also encourage more players and ultimately bring us closer to Nigeria’s financial inclusion goal of achieving a 20% reduction in the excluded population by 2020.

Kenya’s largest Telco announced a fee waiver on M-Pesa, the country’s leading mobile money product for 90 days to reduce the physical exchange of currency in response to the COVID-19 outbreak following a directive from Kenya’s President Uhuru Kenyatta to explore ways of deepening mobile-money usage to reduce risk of spreading the virus through physical handling of cash. Implementation of such measures will use digital finance as a lever to influence social distancing, P2P transactions and financial inclusion in an infectious health crisis.

Fintech and Social Enterprises: There is an opportunity for fintech companies to innovate and go beyond payments and transactions. One of the many effects of the pandemic and lockdown measures is an increase in illnesses especially in rural and densely populated households or communities where social distancing is nothing but a pipe dream. This is the time to collaborate with health management and pension organisations to develop a product that caters to the vulnerable and under-served.

Micro & SME Businesses and Households: Nigeria with over 37 million micro, small and medium enterprises (MSMEs) account for over 84% of the jobs in the country; the Central Bank of Nigeria, taking the 48.5% contribution of the sector to our GDP, introduced the N50 billion Targeted Credit Facility (TCF) in March 2020 as a stimulus package to support households and MSMEs affected by the COVID-19 pandemic. This facility will be disbursed through the NIRSAL Microfinance Bank (NMFB) with a reviewed maximum amount for MSMEs now pegged at N2.5mm (formerly 15mm) and a moratorium period of up to 1 year.

To date 80,000+ number of applications have been received and you can access the guidelines and application via the NMFB. There is also a need for a membership or association system to be created for hawkers and road side sellers who fall under the category of micro-businesses to access to facilities such as the COVID relief for affected businesses. The association will be responsible for disbursement, monitoring and repayment of the facility.

Government Agencies

As it is, the government is fast losing the trust of its citizens as the stories from the implementation of social protection programmes are highly discouraging. Although we are in a too little too late situation, I will still recommend that the government makes financial inclusion and biometric registration an essential part of its social registration process. This will reduce the risk of paying “ghost beneficiaries”as each person registered will have the BVN as a unique identifier.

In the US where there is a stimulus package for citizens earning less than 75000 USD. Eligible citizens are now receiving $1200 monthly support. 7 eleven (a Walmart competitor) and Mastercard created a card with an account behind it to quickly capture the excluded and reduce their wait time to receive the stimulus by several weeks when compared to the post-delivery option.

Also Read: Women in Tech: Interview With Ellen Fischat, Founder Story Room and Inspiring Fifty SA Ambassador

Written by: Onyeka Akpaida is a financial service professional with 9+years of experience in financial inclusion, consumer-centric digital banking and public sector engagement in a top tier leading International Bank and the founder of Rendra Foundation where she works to promote financial inclusion for low- income and migrant women in northern Nigeria.

Rendra Foundation


Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Press Release

The Legatum Center for Development & Entrepreneurship at the MIT launches Foundry Fellowship for entrepreneurs in Africa

Published

on

The Legatum Center for Development & Entrepreneurship at MIT has launched the Foundry Fellowship, a first-of-its-kind leadership program for accomplished entrepreneurs who are considering their role in shaping the future of the African innovation ecosystems in which they work and live. At an inflection point in their entrepreneurial journeys, Fellows will learn from MIT faculty, connect with investors, and expand their network of peer innovators. The Fellowship is open to entrepreneurs working and living in Uganda, Ethiopia, Ghana, Nigeria, Kenya, Rwanda, and Senegal.

Building on the MIT ethos of Mens et Manus (Mind and Hand), the Foundry is a place where entrepreneurs come together to reflect on their achievements and shape their futures as leaders in business, investing, and governance. The program includes an interactive online curriculum followed by a three-week immersive session that brings the cohort together to explore innovation-driven ecosystems.

The Foundry Fellowship presents a unique opportunity to bring MIT resources and knowledge to these critical innovation ecosystems and, importantly, also offers MIT an opportunity to learn from successful leaders and their innovative solutions.

Professor Fiona Murray, Faculty Director of the Legatum Center, described this opportunity to expand MIT’s innovation network “[as] a moment for the Fellows to reflect on [their entrepreneurial] journey that also allows us to learn from them. They can use this experience as a stepping-off point as they move to the next stage of ecosystem-wide leadership.”

“As a school dedicated to the development of principled, innovative leaders who improve the world, MIT Sloan looks forward to welcoming the Legatum Foundry Fellows to Cambridge and to the MIT community,” said David Schmittlein, John C Head III Dean of the MIT Sloan School of Management.

A Collaboration between the Legatum Center and The Mastercard Foundation 

Through this collaboration with the Mastercard Foundation, the Foundry Fellowship will deepen the impact of leaders who are solving complex problems, creating jobs, and bringing essential services to millions through innovation-driven business models.

With the world’s fastest growing youth population, Africa is home to 4 of the world’s top 5 fastest-growing economies, has the fastest urbanization rate in the world, and has a rapidly expanding middle class predicted to increase business and consumer spending. Innovation and entrepreneurial solutions are a critical component to continued growth and prosperous people and societies across the continent. Africa’s entrepreneurs are building businesses that offer lessons in inclusion, sustainability, and value creation that extend far beyond the continent. As a global network of entrepreneurs, investors, and thought leaders, the Legatum Center’s Foundry offers a platform for leaders to share their stories and consider new ways to extend their impact in their local ecosystems and around the world.

Dina Sherif, Executive Director of the Legatum Center says, “To propel Africa forward and remain competitive globally, we need innovation-led entrepreneurship and robust African entrepreneurial ecosystems. The Foundry Fellowship supports African entrepreneurs to transition to entrepreneurial leaders who work with various stakeholders to strengthen and improve their ecosystems.”

The Foundry Fellowship is a competitive program for outstanding entrepreneurial leaders working in Ethiopia, Ghana, Kenya, Nigeria, Rwanda, Senegal, and Uganda. The Legatum Center will accept nominations from May 3 – May 20, 2021. A nomination is not required to apply; entrepreneurs are invited to submit an application directly. All nominees and applicants must submit a completed application by 11:59 PM EDT on June 10, 2021 to be considered for the program.

Nomination and application information is available at The Legatum Center for Development & Entrepreneurship

An initial cohort of 15 Fellows will be selected for this fully-funded program.

 

Download BAO E-MAGAZINE

Continue Reading

Press Release

AI Expo Africa, Wesgro, and Zindi launch the Deepfake Africa Challenge

Published

on

AI Expo Africa, in partnership with Wesgro Film and Media Promotion and African Data Science competition platform Zindi, has launched the Deepfake Africa Challenge in a bid to raise awareness about deepfake media, tools and ethics on the African continent.

Deepfakes have been prominent in the news in the last two years as the tools and platforms that allow for such content to be produced are widely available and easy to use by both skilled and casual users.

While some deepfakes can be used to create fun, viral videos or new synthetic applications such as digital avatars that have multiple applications, they also can be used to manipulate or generate visual and audio content with the potential to deceive with subsequent negative impacts for people, organisations and wider society.

Dr Nick Bradshaw, founder & CEO of AI Media the company behind AI Expo Africa, stated, “The objective of the challenge is to create convincing deepfakes to highlight the power of this synthetic media, illustrating its creative potential for exploitation for both positive and negative outcomes and focusing debate about its ethical use or mis-use in an African context. We partnered with Zindi as they have the largest community of Data Scientists in Africa, and Wesgro Film Unit to tap into the award-winning creative industry based in the Western Cape, South Africa. This challenge is open to both creative and technical talent across Africa. We look forward to seeing the outcomes from the submission.”

Wesgro Film and Media Promotion head Monica Rorvik commented, “Deepfake media can have negative outcomes. This challenge serves as an opportunity and platform that we can leverage during this interesting time of the “Pandemic of deep fakes” – and by working together, and checking facts, we can learn together and gain some herd immunity.”

Zindi co-founder and CEO Celina Lee stated “Deepfakes are fast becoming a challenge of our time. Through the Zindi platform we are seeking to tap into the collective insights and creativity from twenty-six thousand African data scientists to shine a light on this topic and create debate about the potential harms these media and tools can do from a uniquely African perspective.”

Submission and evaluation

Submissions are welcome from across the African continent and from relevant communities including researchers, developers, content creatives and film makers. The winning submissions of the Deepfake Africa Challenge will be showcased at AI Expo Africa 2021 ONLINE between 7 to 9 September.

Submissions for the Deepfake Africa Challenge can be either video or audio based. Each submission should be no longer than 90 seconds in length (MP4 or MP3 preferred final format). The content submitted must not be offensive or harmful in anyway and any submissions deemed to contravene this rule by the judges will be immediately rejected.Winners must be citizens of an African country and must be residing in Africa.All entries will be judged as follows:
  1. Artistic creativity and relevance to the challenge topic
  2. Level of innovation used in the process to generate the content
  3. A short explanation of platforms, tools and techniques used to generate your submission will greatly enhance your submission and are encouraged so we can build a picture of the most common tools and techniques used

The judging panel will be made up of representatives from Zindi, The AI Media Group and Wesgro. The judge’s decision will be final.

Prizes

1st Place Winner: Complimentary ticket to join AI Expo Africa 2021 ONLINE (including 1x return economy flight & 4x nights hotel stay B&B courtesy of Radisson Blue to join us at AI Expo Africa 2022). The 1st Place Winner’s flight is eligible to delegates joining from outside the host city capped to $1000 using economy class fare. Expenses and visas are not included.

2nd and 3rd prize winners to receive 1x complimentary ticket to AI Expo Africa 2021 ONLINE.

Top 3 placed winners will have work showcased at AI Expo Africa 2021 along with write up and press mentions.

Timeline

The competition closes on 30th July 2021. Final submissions must be received no later than 11:59 PM GMT 30th July 2021. Winners will be notified and announced by 17 August 2021 with the winning submissions being showcased at AI Expo Africa 2021 ONLINE between 7-9 September.

The challenge organisers reserve the right to update the content timeline if necessary.

 

Download BAO E-MAGAZINE

Continue Reading

Business Home

Possibilities of Making Profits On Crypto, Risk-Free

Published

on

Over the course of the last decade, cryptocurrencies have experienced unprecedented growth and garnered a lot of interest across a range of demographics from all over the world. Interest in digital currencies is spiking globally and search terms such as “how to buy Bitcoin” have seen an uptick in interest according to Google trends. This is just one of many indicators that suggests a notable influx of people are entering the blockchain space and looking to explore the crypto ecosystem.

While the market cap of digital assets has varied extremely with price fluctuations, it, however, grew from about US$10 billion in 2013 to about $237 billion in 2019. Also, in the last 5 years, the increase in Bitcoin (BTC) private accounts and trades has averaged about sixty percent every year. Currently, the market cap for digital currencies is just above $2 trillion.

Even though many people have made early gains in digital assets, the cryptocurrency space is still in the early phase of development. The Internet for example, was created in 1969 and the “worldwide web” was designed in 1989 and subsequently the first web browser in 1990. Compared to those revolutionary technologies which massively transformed the communications landscape, blockchain technology is nascent and cryptocurrencies have only been in use for only a decade.

Crypto goes mainstream

Social media has exposed a lot of people to the crypto industry. The mass media is quick to broadcast the movements in bitcoin prices, leading to FOMO and FUD or the hysteria that sometimes characterizes crypto markets. Overall the ever growing coverage has done more to spur further development of new innovations within the space.

The price increase of cryptocurrency will probably be boosted by increased cryptocurrency adoption. While many institutions have started to invest and buy Bitcoin, there are still a lot of firms waiting in line to invest and buy Bitcoin. The average volume of digital assets transacted on any given day is just one percent of the FX trade. Regardless of cryptocurrencies increasing to more than $2 trillion in market cap according to Coinmarketcap, digital assets are still a tiny fraction of global equity trade ($34.8 trillion in 2020) and worldwide debt trade (over 281 trillion in 2020) according to Bloomberg.

With more institutional adoption of Bitcoin and other digital assets, traders and investors are presented with more chances to make money in the digital asset space.

How to make money with crypto

There are several ways of making profits with digital assets. Given that digital assets are basically volatile, many digital assets involve a great level of risk while some need greater expertise. It is important to have prerequisite knowledge about digital assets before you buy bitcoin.

One of the ways of making profits with cryptocurrency is through investing. This is generally for long-term purposes. It requires you to buy Bitcoin or other cryptocurrencies and hold them for a chosen period of time. This can be done via different traditional crypto exchanges or P2P platforms like Remitano. Digital assets are usually well-suited to the investing practice of buying low, holding and then selling high. Cryptocurrencies are highly volatile in shorter timeframes, however, they typically and have historically offered a much more lucrative upside over long periods compared to traditional investment vehicles.

Studies have also shown that most BTC profits are realized in the ten best trading periods of the year.

Due to cryptocurrencies being naturally volatile, investing for a long period is one of the ways of making profits with cryptocurrency. Just like with any type of investing, risks have to be thoroughly considered and expectations of rewards have to be managed well.

Another way of making profits with cryptocurrency is to trade digital assets. The most notable difference between investing and trading is the general time frames between entering and exiting positions. Investing is for a long period, while trading is basically to leverage opportunities over a short period. To trade digital assets successfully, it is important to know the basic fundamentals and have the capability to conduct technical analysis in order to avoid making costly mistakes.

Making profits via trading cryptocurrencies is more about knowing the price trend and pattern and utilizing it to forecast future value, many times over a short period. Find out the 20 best platforms to buy Bitcoin and other digital currencies in South Africa.

What is the possibility of making profits on crypto, risk-free?

Trading digital assets sounds relatively easy, however, due to the highly volatile nature of crypto assets, it involves a lot of risks. One of the ways to make profits on cryptocurrency with relatively low risk is by doing cryptocurrency arbitrage. This trading method exploits price and demand gaps between different digital asset marketplaces. But, the trades have to be done almost instantaneously to realize gains.

Arbitrage Trading

Crypto arbitrage involves exploiting price differences on different crypto exchanges for your benefit. This method is effective in places where bitcoin price varies from one exchange to the other like in South Africa and Nigeria. The price differences could be a result of several factors.

Arbitrage trading involves buying bitcoin or other digital assets from one exchange and selling it on other exchanges at a higher price. Selling the asset after the purchase must be done relatively quickly to avoid price movements narrowing margins or leading to loss at times.

Exploiting the price difference using the cryptocurrency arbitrage technique requires a cryptocurrency market that has price discrepancies depending on the supply and demand in the different markets.

Remitano Invest

Another way to make money risk-free is with Remitano Invest. Remitano invest allows you to buy and invest in cryptocurrencies without putting your capital at risk.

How?

With the Stop Loss and Take Profit features, your crypto asset will be liquidated to USDT (a stable coin) to prevent loss and maximize your profit. You simply set the auto sell price for the Stop Loss and Take Profit. When the asset you have invested hits your Take Profit price, Remitano Invest converts it into USDT to secure your profit. However, if the asset’s price falls to your Stop Loss price, the system will convert it into USDT to help you secure your capital and prevent further loss.

Risks and benefits are an intrinsic part of most money markets and they go hand in hand. Risks cannot be eradicated but they can be managed. Some risks can be managed by utilizing effective risk management practices. Personal risks like wallet hacks, coin theft, and loss of access to funds can be offset by making sure you implement good security practices.

Article & Image source: Heath Muchena

 

Download BAO E-MAGAZINE

Continue Reading

Ads

Most Viewed