Worried about the slow adoption rate in digital transactions in developing countries, Nigeria inclusive, the International Telecommunications Union (ITU), is considering new measures on how to create more global awareness around digital transactions, that will make more people get involved in online transactions, designed to boost digital financial inclusion.
ITU, which is an agency of the United Nation responsible for global telecommunications regulation, observed that majority of people across globe, especially in developing countries of the world, have mobile phones, yet they do not have access financial services.
The Chief of Study Groups Department for ITU’s Telecommunication Standardisation Bureau, Mr. Bilel Jamoussi, who made the disclosure at the just concluded Financial Inclusion Global Initiative Symposium, which held in Cairo, Egypt.
He said: “There are 1.7 billion adults today, who do not have any access to financial services, and about 1.2 billion of the same people have mobile phones,” a situation he said, was becoming worrisome.
The figure, according to him, represents a huge opportunity to bring financial services to the unbanked, but it is important that regulators from both the finance and technology sectors have a conversation to create a new enabling environment for financial services.
In Nigeria, the central bank had since introduced the cashless economy policy that will drive financial inclusion.
The 2018 financial inclusion survey on financial inclusion by the Enhancing Financial Innovation & Access (EFInA) showed that in Nigeria, the hope of achieving the country’s 80 per cent target by 2020 was on track. The survey showed that 63.6 per cent of Nigeria’s adult population now has access to financial services and only 36.6 per cent are presently financially excluded.
EFInA is a non-governmental organization and a financial sector development organisation funded by the Department for International Development (DFID) and Bill & Melinda Gates Foundation towards promoting financial inclusion in Nigeria.
The latest report covered 750 respondents in each of the 36 states and the Federal Capital Territory (FCT), and 27,470 interviews, which represented 97 per cent of the target sample of 28,380.
The survey was anchored on several indicators including banked population; remittances; savings with a bank; payments; received income; loan with a bank; and banking agents, among others.
Beside these, card payments on Point of sale (PoS) terminals in Nigeria have also grown from a paltry 5,000 monthly volume in 2011 to 30 million in November 2018, all thanks to the success of the cashless Nigeria initiative.
However, in order to bridge the global financial inclusion gap, the Financial Inclusion Global Initiative (FIGI), a partnership led by ITU, the World Bank Group and the Committee on Payments and Market Infrastructure, and with financial support from the Bill & Melinda Gates Foundation, plans to advance research in digital finance and accelerate digital financial inclusion in developing countries.
“We have three implementation countries: Egypt, Mexico, and China. And we have three working groups: one on electronic payment acceptance, another on digital ID, and another on security infrastructure and trust, led by the ITU,” Jamoussi, said.
“The idea is to really continue the momentum, share the knowledge, and provide policymakers, ministers, telecom regulators, and central bank governors with the tools that they can use,” Jamoussi further said.
He explained that after about a year and a half of in-country implementation, a lot has been learned about country-specific needs.
“The working groups have developed solutions to secure the transactions providing quality of service, and the essence is to boost financial inclusion among developing countries,” Jamoussi said.
Jamoussi explained that FIGI was already developing tools and recommendations that policymakers can use to create change in their countries, as well as allow technologists to gain a better understanding of the technologies they can further develop to increase the trust in these financial transactions.
He emphasised that a key element for people to move from cash to digital financial services is psychological — whether they trust the devices to send or receive money.
