Experts in the technology space have urged Nigerians to take full advantage of the products and services emanating from Financial Technology (Fin Tech) companies. According to them, the call became necessary following recent reports on the how economies are built on digital finance.
The experts were of the view that tomorrow’s economy would be built on digital finance as the world looks for alternative and faster ways to achieve inclusive growth, empowering individuals, businesses and governments to carry out cheaper and more effective transactions.
One of such experts, SystemSpecs Executive Director, Deremi Atanda, while citing the McKinsey report for September 2016, which reinforces the projection, giving insight that “widespread adoption and use of digital finance could increase the Gross Domestic Products (GDP) of all emerging economies by six percent, or a total of $3.7 trillion, by 2025,” said it goes on to explain that additional GDP will generate 95 million new jobs across all sectors of the economy, provide access to 1.6 billion unbanked people, while governments could gain $110 billion yearly by reducing leakages in public spending and tax collection.
“As one of the emerging economies, Nigeria is poised to leverage the opportunities associated with this projection. This year’s KPMG FinTech Report says Nigeria is fast becoming a dynamic ecosystem bursting at the seams with opportunities for FinTech start-ups,” Atanda said.
According to current statistics, less than 50 million people have bank accounts in Nigeria’s population of over 170 million people, 115 million of whom are youthful and use mobile phones for financial transactions. Not surprisingly, FinTech companies are cashing in to launch products cutting across lending, payment, transfer, purchasing, investing/borrowing and switching.
Paga, PayPal, PaywithCapture, QuickTeller, GTMobile, e-Tranzact and Remita are only a handful of the dominant players in Nigeria’s burgeoning FinTech industry. Collectively, they have made financial transactions much easier, eliminating the need for consumers to join long queues in banking halls or restrict their financial transactions to official work hours Mondays through Fridays.
Some FinTech products such as Remita have gone beyond basic financial services to impact government finance and national bottom lines massively. Launched in 2006, Remita is an electronic platform that helps the government, corporate organisations, SMEs and individuals make and receive payments easily. It aggregates multiple bank accounts, giving customers the ability to perform the complete suite of eTransactions.
On September 15, 2015, Nigeria adopted the Treasury Single Account (TSA) policy, praised at home and abroad for returning over N4.3 trillion cash assets to the country’s treasury.
The policy, initiated by the President Goodluck Jonathan administration but implemented by the President Muhammadu Buhari administration, stipulates that government funds generated from taxes, levies and tariffs should be deposited in the Central Bank of Nigeria (CBN) and disbursed subject to stringent procedures to ensure accountability in the management of government cash resources.
For years, the government’s attempts to adopt TSA were unsuccessful, as the CBN lacked the technological capacity to manage the retail aspect of the policy. A foreign e-technology platform, RTGS, initially expected to drive the payment leg of Nigeria’s TSA project, was subsequently found to be unsuitable for retail payments.
SystemSpecs came into the picture and wasted no time overcoming this challenge with Remita.
According to Atanda, one year on, the government has identified and closed over 17,000 ministries, departments and agencies (MDA) accounts and transferred the recovered funds to the TSA. Deposit money banks have also been constrained to diversify their sources of deposit mobilisation rather than rely on these idle funds which yielded interest for faceless individuals and groups while the government was starved of funds.
Remita, according to Atanda, processes over $30 billion worth of transactions every year, and that is just within Nigeria.
“There’s also a roadmap to take Remita to Africa. So if you have a vision to be part of revolutionising payments in Africa at whatever level, driving financial inclusion at the national level, savings, micro-savings and micro-transactions, Remita is best placed to help you achieve that,” Atanda said.
Other Fin Tech experts also said that Remita is also at the forefront of driving the national financial inclusion policy, and is currently used by about 500 micro-finance banks to meet the needs of many Nigerians who lack access to commercial banking services, empowering them to extend financial services to unbanked Nigerians.