One million bank accounts opened monthly as financial inclusion rate increases, says NIBSS MD
Mr Niyi Ajao, Managing Director, Nigeria Inter Bank Settlement System (NIBSS), says one million bank accounts are opened monthly by Nigerians as the nation’s financial inclusion rate increased to 63.6 per cent from 45.4 per cent recorded in 2016.
Ajao made the disclosure at the launch of the 2018 Financial Inclusion Survey by Enhancing Financial Innovation and Access (EFInA) on Tuesday in Lagos.
He said with the rise in the rate, the efforts of stakeholders in the financial industry were beginning to pay off.
Ajao, however, said that there was need to do more if the country would meet the 20 per cent exclusion rate by 2020.
According to the survey, 63.6 per cent of Nigeria’s adult population of 99.6 million have access to financial services, while 36.4 per cent, equalling 36.6 million of the adult population are financially excluded.
Out of the 36.6 million adult population that are financially excluded, 55.9 per cent are women, while 44.1 per cent are men.
The survey also showed that 39.7 per cent of the population are banked.
Ajao said that NIBSS, which holds data for the banking industry had recorded up to one million new accounts being opened in banks on a monthly basis.
He said that majority of the new accounts were opened by people who already had accounts.
The managing director said that more than 30 million Bank Verification Number (BVN) holders had continued to make more transactions as the volume of electronic transactions grew.
“When we look at the figures for adult population for EFINA report for 2016, 96.4 million and now 99.6 million.
“This is about 3.3 per cent growth of adult population if you look at the number of financially included, 56.4 million as at 2016 has grown to 63.6 million in 2018 that is a growth of 11 per cent.
“So, the increase is way above the population growth and that means the efforts of all players have yielded fruits but we need to continue with the efforts.
“This is because we still have a lot to conquer if we must achieve the 20 per cent exclusion by 2020.
“We have seen NIBSS Instant Payment (NIP) which we use to gauge the payment behaviour of Nigerians from 2016 up,” Ajao said.
He said that the inclusion rate was growing slowly until 2018 when the volume doubled year on year.
“This year by our projection, we will be doing one billion NIP in 2018. We did half of that in 2017.
“It is clear that what we are experiencing is that it is the few banked people that are doing all the transactions.
“Throughout 2017, the volume of transactions kept on growing, instant payment, Point of Sale (POS), bulk payment, even during the recession when the value of transaction became smaller, we were having more and more volume done.
“That again points out that we are winning the war gradually against cash. More people that would have done cash are now doing e-payment,” Ajao said.
“However, the few banked are the ones doing majority of the transactions.
“This year alone, we have 9.9 BVN holders do all the instant payment transactions we saw in the third quarter and that shows the structure we have in place.
“This growth looks much lower than what we see in the bulk of e-payment, it is this same account holders who are opening new accounts and who are doing more transactions.” (NAN)
Microinsurance is driving greater financial inclusion, says aYo Ghana CEO
There has been a ‘material increase’ in awareness of financial service products like microinsurance during 2021, with growing numbers of Ghanaian consumers purchasing cover to protect themselves and their families in the event of hospitalisation or loss of life.
Francis Gota, the CEO of microinsurer aYo Intermediaries Ghana Limited, says the company has seen a strong increase in its customer base since the start of the pandemic, with more than 6 million customers on its books at the beginning of November. It expects to add another 1.8 million customers in 2022. The company offers Hospitalisation and Life Insurance Cover through its two insurance products, ‘Send with Care’ and ‘Recharge with Care’.
In 2020, the company paid claims of about GH¢2.4 million to more than 8,000 customers.
“Microinsurance is dispelling the myth that insurance is just for the wealthy, educated, and formal-sector employees. Today, every Ghanaian consumer can purchase insurance on the go, using their mobile phones. Phone penetration and technological advancements are making it much easier to reach clients and provide better, more cost-effective service,” said Mr Gota.
Microinsurance is seen as a powerful enabler of financial inclusion in African markets, providing a much-needed social safety net that helps vulnerable people and particularly people with low incomes to stay afloat when the unexpected happens.
“Covid has made many people aware that tomorrow is not promised. As a result, many consumers have a better appreciation for insurance now, and this given us an opportunity to help protect more people than ever before, by providing cover against unexpected life events,” said Mr Gota.
Over 6 million subscribers are currently using aYo’s Recharge with Care product, which offers life and hospital insurance cover every time customers recharge their MTN airtime. Customers can get up to GH¢120 for each night they are admitted to hospital, and up to GH¢6,000 life cover for themselves and one family member who is registered on the policy.
How to sign up
For Recharge with Care, subscribers sign up via app.ayo4u.com or by dialling *296#, selecting option 1 and following the prompts. They can sign up for MyLife, MyHospital, or both. A maximum premium of GH¢6.00 provides cover that is valid for 30 days. Subscribers use the same process for filing claims (*296#, option 1, option 7, and follow the prompts.) Valid claims are paid directly to the claimant’s mobile money wallet.
MTN MoMo subscribers can send MoMo through aYo Send with Care by dialling *170#, select option 1 (transfer money) and then option 3 (Send with Care) on the mobile money menu. This will give them up to GH¢30,000.00 hospital and life insurance cover for themselves, and up to GH¢3,000.00 life cover for their family members (the receivers of the MoMo).
aYo partners with MTN to launch insurance for all Ivorians
Panel Guests: From the left: Laurent Koffi Senior Manager Segments Mobile Financial Service of MTN Cote d’lvoire; Jean-Charles N’Gotta CEO of aYo Cote d’lvoire; Marius Botha Group CEO of aYo Holdings; Philippe Attobra CEO of Sanlam Assurance Vie (Image: Karli Stock)
aYo Holdings, African microinsurance fintech together with telecommunications giant MTN and Sanlam Life has launched two innovative insurance products in Côte d’Ivoire that will contribute towards MTN subscribers enjoying peace of mind.
CEO of aYo Intermediaries Cote d’Ivoire Limited, Jean-Charles N’Gotta, said: “It is estimated that less than 2% of the Ivorian population currently has insurance. This is because most people think insurance is only for white collar workers with high incomes. We want to show that with aYo services, people with all levels of income can get peace of mind at an affordable cost to help take care of their financial health even after hospital bills due to an accident or illness, or their funeral expenses if the unforeseen happens and they pass away.”
Two basic products will be available at launch once consumers sign up to aYo:
aYo Recharge+ rewards MTN MoMo (Mobile Money) users by offering free accidental hospitalisation cover and life cover each time customers purchase airtime via MoMo. Customers can also take advantage of the AutoBoost, paid-for, functionality to get even more cover with every MTN airtime recharge.
With the free component of aYo Recharge+, each time a customer uses their MoMo wallet to recharge airtime, they get 8 times that amount as accident cover and 12 times that amount as life cover. When they take advantage of AutoBoost to buy additional cover (from 25 CFA to 300 CFA), this amount is multiplied by 200 for additional accident hospitalisation cover and by 300 for additional life cover.
aYo Kash+ offers cover for illness and accidental hospitalisations as well as life cover each time a consumer sends money, pays utility bills or school fees via MTN MoMo. Each time a customer makes a person-to-person money transfer or pays a bill using MTN MoMo, they get illness cover equal to the amount they spend in that transaction, accident and life covers for three times the amount transacted by paying a 5% premium. When they pay school fees using MTN MoMo, they get life cover for twice the amount transacted by paying a 2% premium.
Getting cover and claiming is as easy as using the aYo progressive web app from your mobile phone by visiting www.ayo.co.ci. Signing up, interacting, and claiming all happens without the need for any physical paperwork. When claiming, the required documents can be attached and sent via WhatsApp too.
aYo launched in January 2017 in Uganda and has reached more than 14 million customers across Uganda, Ghana and Zambia. The company has paid in excess of over $1 million in claims.
“Insurance, and the peace of mind it provides, has become more important than ever in today’s fast-paced world, where risks are a part of our daily lives. You never know when you will have to pay to get back on your feet after an accident or an illness. Often, the cost is so large that it goes beyond your immediate financial capacity, and that is where aYo and our innovative products will be most helpful,” said Jean-Charles N’Gotta.
Microinsurance can mirror mobile money boom in Africa – if the conditions are right
Marius Botha, Group CEO of African Insurtech aYo Holdings
When it comes to mobile money, there’s no doubt that Africa leads the world. From humble beginnings as a peer-to-peer money transfer system back in 2007, it has boomed to nearly $500bn in transactions in 2020, with more than 560 million users across the continent.
According to the GSMA’s State of the Industry Report on Mobile Money 2021, global daily mobile money transactions exceeded $2 billion for the first time last year, and are expected to pass $3 billion a day by the end of 2022. And there’s still more growth where that came from. According to the Wall Street Journal, only 45% of the continent’s population has an active mobile phone.
What’s interesting is that customers are not only using their accounts more frequently, they are also using them for new and more advanced use cases. Many of the socio-economic and development challenges arising from the pandemic are being tackled with mobile money solutions. This suggests that more people are moving away from the margins of financial systems and are leading increasingly digital lives, the report said.
This is particularly good news for the microinsurance sector, which is growing steadily across Africa on the back of mobile network expansion, and is covering millions of people against financial shocks caused by unexpected life events.
Will microinsurance’s growth mirror that of the mobile money space in Africa? It’s hard to say at this stage. Right now, there are 130 mobile-enabled insurance services in 28 countries, with over half offering coverage for life and funeral or health and hospitalisation services. According to the GMSA report, 43 million policies were issued in 2020, two-thirds (29 million) of which were life and health insurance policies.
For microinsurance to show MoMo-like growth a few things have to happen:
First, a shift in existing perceptions of insurance as something that’s expensive, reserved for the middle class, or not to be trusted. This shift is slowly gathering momentum, largely through word of mouth. The more people experience the tangible benefits of microinsurance, the more they talk about it in their community, which drives greater trust – and ultimately, greater uptake.
Secondly, we need greater diversification of product and benefit options. While some insurance providers have already expanded their offerings from life and health insurance to income protection, education and even house insurance, life and health coverage remain the prevailing offerings.
Thirdly, it’s vital to have enabling insurance and telco regulations across the continent. For example, tax on the use of airtime as a premium collection method in some markets will have to be exempted in some countries. In others, restrictions on mobile money premium collections will have to be amended. The challenge is to build in consumer protection mechanisms to prevent over-charging of customer airtime or mobile money wallets from multiple products, and to ensure sufficient balances remain for other spending needs. We certainly don’t want to see outcomes similar to over-indebted consumers burdened with additional debit order or payroll collections for insurance, as has happened in some markets in the past.
Finally, we need to ensure profitable business models for all product providers in the value chain. While mobile channels reduce the marginal costs of accessing information and participating in financial service activities, the industry still relies on driving sufficiently high volumes of transactions at low costs, and low-cost distribution models. Many consumers still demand some level of face-to-face intermediation, which adds a layer of costs to the equation.
The stage is set for microinsurance to boom in Africa – and hopefully follow the mobile money growth trajectory. And that will be good for everyone, most of all consumers who are currently underserved and under-covered. Let the growth begin.
By Marius Botha, Group CEO of African Insurtech aYo Holdings
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