By Henry Chukwu, Programme Specialist, Enhancing Financial Innovation & Access (EFInA)
The expectation of closing the 16.8% shortfall in the Nigerian financial inclusion target is threatened as the recent EFInA survey on financial services agents shows that percentage of agents who offer account opening services has decreased significantly since 2015.
Agent banking is a key driver of financial inclusion and very useful in providing access to financial services, especially in underserved/unserved areas. The National Financial Inclusion Strategy identified agents as an important channel for achieving the financial inclusion target. The Shared Agent Network Expansion Facilities (SANEF) has been actively coordinating providers towards achieving the target of 500,000 agents by the end of this year.
However, if agents are not driving account opening, it makes it harder to achieve the national financial inclusion target. This calls for an urgent need for financial service providers (FSPs) to address the factors driving this trend and offer more incentives to agents to facilitate account opening.
Additional challenges hindering agent operations and key recommendations
The study revealed that financial services agents lose about 2% of their recurring monthly cost to transactions associated with fraud. In recent times, agent banking business has been threatened by robbery, fraud, and harassment from law enforcement agencies. Some agents have been arrested and imprisoned for processing transactions linked to fraud unknown to them. FSPs need to invest more on agent training, especially on fraud prevention and management. Agents need to know how to identify, document and escalate to their principals any suspicious transaction.
Liquidity management is still a huge problem for agents. The report shows that 6 out of 10 agents run out of cash at least once per week, on average. This is unsurprising given the most patronised agent service is cash withdrawal. 66% of agents interviewed cannot access loans to manage the amount of money they have available to transact, which is referred to as “float.”
To address this lingering challenge, providers need to seek partnerships with digital credit providers, banks, and others to unlock access to credit opportunities for agents. Super Agents can negotiate for bank partnerships to allow them access overdraft facilities or float loans – even if it means targeting weekend float loans to start as they monitor the performance of these loans. Beyond liquidity management issues, failed transactions and platform instability are the top challenges faced by agents. This has potential to affect trust, uptake, and usage of agent services. As such, there is need for stakeholders to collaboratively build initiatives to address this bottleneck.
The survey also revealed that 30% of agents are dedicated and are profitable. However, the guidelines for the regulation of agent banking and agent banking relationships in Nigeria states that an agent must be an entity that have been in legitimate commercial activity for at least twelve months immediately preceding the date of the application to become an agent and the business must be a going concern.
Market information shows limited or no compliance from providers. The market realities are facilitating the evolution of the agency business from non-dedication to dedication, implying market maturity. This may be the right time for the regulator to review the existing guidelines to meet the current market reality.
Agents are determining the customer charges. About 2 out of 5 agents charge above the maximum fees prescribed by CBN. On the average, agent commission make up 55% of the price charged. Agents who charge extra fees reported that they do so to remain profitable and stay in business. The cost to serve differs across different locations and is driven by other factors such as seasonality, availability of alternative channels, operational cost, among others. Perhaps this is the right time for deregulation of agent pricing to allow for market-based pricing, which may encourage more widespread deployment of agents, particularly in difficult-to-serve remote areas with high rates of financial exclusion.
You can access the survey report on the EFInA’s website right here.
Leadway Pensure PFA bags Customer Service Excellence award at Africa Brands Awards 2021
Leadway Pensure’s award reaffirms its commitment over the years to giving its clients amazing experiences beyond the call of duty.
Leadway Pensure PFA Limited, Nigeria’s foremost pension funds administrator, has been recognized as the most admired pension brand in Nigeria following its emergence as the winner of the Customer Excellence Award at the 2021 edition of the Africa Brands Awards.
The prestigious African Brands Awards was created over a decade ago to promote innovation and creativity amongst African brands across different industries. The emergence of Leadway Pensure as the winner of the Customer Service Excellence award in the pension category reaffirms the brand’s customer-centricity and its commitment over the years to giving its clients amazing experiences beyond the call of duty. The recognition comes at a crucial period in the pensions industry with the opening of the transfer window which allows customers move their retirement savings account from their existing PFA to another.
Still on the recognition, the Managing Director, Leadway Pensure PFA Limited, Mrs. Ronke Adedeji, stated that receiving the award was a testament to how the brand had treated its clients and the positive perception it had been able to create in the larger society. According to her, “Our clients are at the center of everything we do, hence, we are constantly innovating and finding new ways to better their experiences with us. We continue to blaze the trail in the industry by finding simple and smarter channels to deliver our services; and optimizing our processes. We are a firm believer that if truly we must assist our clients to get more out of life, we must also continuously explore effective and efficient ways of delivering pension services.”
Mrs. Adedeji hinted that the company invested heavily in digital channels aimed at easing tracking, reporting, and communicating with its clients. “In addition to our long-standing heritage of excellence and competitive returns on investments, we prioritize accessibility for our clients by launching online channels to connect with them. Some of the online channels include our Online Enrolment Portal that allows users to remotely open a Retirement Savings Account (RSA) and get their RSA PIN instantly, our Mobile App, Interactive SMS, Pensure Online (p-Online), SureCal (Pensure Calculator), amongst others. We are unwavering in our promise to all existing and potential clients to continuously offer pension plans and experiences that surpass their expectations,” Mrs. Adedeji said.
It is important to note that the company also recently received the ISO 27001 certification, a globally coveted standards certification that recognizes commitment to the highest standards of information data security management.
Leadway Pensure has, over the years, shown itself as one of the leading PFA’s in Nigeria. It continues to advance the PFA industry by devising unique ways to service the ecosystem and deliver value to all stakeholders. Leadway Pensure is one of the most capitalized PFA’s in Nigeria with an authorized share capital of N2.0 Billion. Our shareholder’s fund is in excess of N7.0 Billion, unimpaired by losses.
ITA partners NEPC to launch first E-Lab Innova training for agribusinesses in Nigeria
The E-Lab Innova is an educational training program for the agri-food sector in Nigeria.
As part of its commitment to boost trade relationships with Nigeria, the Italian Trade Agency, a governmental agency that supports the business development, partnerships and collaborations between Italian companies and their local counterparts, has launched the first E-Lab Innova in Nigeria. The E-Lab Innova is an educational training program for the agri-food sector in Nigeria which will be implemented in collaboration with the Nigerian Export Promotion Commission (NEPC) alongside other Italian partners, such as MACFRUT, a leading exhibition for the agribusiness industry.
The training is aimed at increasing the technical and managerial skills of Nigerian agri-food companies in order to support their access to EU markets and foster business partnerships with Italian companies. Participants which were selected with the support of NEPC are CEOs of high-potential companies active in the production of foods such as mango, pineapple, shea nuts and groundnuts. The programme is scheduled to hold for the duration of five weeks and will be implemented in three phases: a preliminary assessment to analyze the technical and management training requirements, company potential and profile design; 2-week webinar training classes focused on key internalization topics and a 5-days study tour in Italy, which will include Macfrut exhibition.
Giving his opening remark at the event held to flag off the training, the Italian Trade Agency Director for West Africa, Dr. Alessandro Gerbino said, “Nigeria remains a strategic point for engagement between the agency and other countries across West Africa. The E-Lab Innova holds prospects for Nigerian companies to be imparted on the knowledge and technicalities of their counterparts abroad whilst also paving the way for collaborations between Italian and Nigerian agribusinesses.”
“It is a pleasure to see the collaboration between the Italian Trade Agency (ITA) and the Nigerian Export Promotion Council (NEPC), to develop the capacity of agribusinesses and aid their integration into the value chain of European Union markets. We remain committed to supporting the government’s plan to create more jobs through the agrofood industry and ensure that these businesses have the right skillset to grow, sustain their operations and contribute to the growth of Nigeria’s economy,” Dr. Gerbino added.
In her keynote address, Uduak Etokowoh, Deputy Director, International Export Offices, Nigerian Export Promotion Council (NEPC), said, “the council constantly seeks out collaborations like this to strengthen trade relations across the world. The European Union (EU) is one of the largest markets for agribusiness, however, challenges such as logistics and inability to meet market needs pose a threat to growth opportunities. In adjusting to the new normal of virtual engagements, we are extremely delighted to partner the ITA to deliver this virtual training in support of wealth creation for the economy and to enhance seamless penetration to the EU markets for Nigerian agribusinesses”.
13 agribusinesses across Nigeria took part in the first training session including United Agro Cooperative Society Limited, Cobrend Trading and more; the programme will involve nearly 40 Nigerian companies in total. Since the launch of Lab Innova in Africa, over 140 companies across Ghana, Angola, Mozambique, Uganda and Ethiopia have successfully gone through the training programme, with study tours and exhibitions held in Italy.
About the Italian Trade Agency in Nigeria
ITA – Italian Trade Agency is the Governmental agency that supports the business development of Italian companies abroad and promotes the attraction of foreign investment in Italy. With a motivated and modern organization and a widespread network of overseas offices, ITA provides information, assistance, consulting, promotion and training to Italian small and medium-sized businesses.
The agency is committed to establishing strong contact with Nigeria with a major focus on industrial technologies that address the growth pattern Nigeria has adopted in several areas, so to add value to local natural resources and raw materials.
Using the most modern multi-channel promotion and communication tools, it acts to assert the excellence of Made in Italy in the world. ITA operates in 70 countries under the Italian Embassy.
Nairametrics | Company Earnings
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- Cornerstone Insurance Plc notifies stakeholders of late submission of financial statements.
- NSE approves delisting of 11 Plc shares.
- Berger Paints Nigeria Plc reports a 67% decline in Profits in FY 2020.
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- Jaiz Bank proposes dividend worth N884 million for shareholders.