By Jonathan Elendu
INTRODUCTION:
What is Financial Inclusion? Financial inclusion is a concerted and deliberate effort to bring into the financial system people who were not involved. The excluded are people who are “unserved or underserved.”
People may be excluded from the financial system for various reasons; including but not limited to the following:
-lack of access to financial institutions, lack of knowledge of financial institutions, misconception of the financial system and deliberate decision to stay out of the financial system.
Most of the people who are excluded from the financial system are mostly women, low income earners and rural dwellers. Rural dwellers, especially in sub-Sahara Africa, are likely to have little or no access to modern technology and electricity.
Such things we take for granted like GSM networks, telephones, cable television, the Internet, etc., would be non-existent in their daily lives.
The short and simple way I would define Financial Inclusion is by saying that people who are in the following situations are financially excluded. Adults who lack or have little or no access to formal financial services such as a savings account, current/checking account, no credit or pre-paid debit cards, no insurance services, no investments in stocks, bonds and debentures, and no deposits of any kind… fixed or fluid with any financial institution.
It is almost impossible to talk about financial inclusion, these days, without digital inclusion. In other words, what we mean when we say financial inclusion is digital financial inclusion. These terms; financial inclusion and digital
financial inclusion would be used interchangeably in the course of this paper.
There is a correlation between a person’s level of access to technology and the degree to the person’s financial inclusion or lack thereof. However, technology is not the only impediment or barrier to financial inclusion. Mobile phones, computers, Internet access are definite barriers to digital financial inclusion.
But so also are lack of financial literacy, socio-cultural norms, and lack of understanding of these norms by innovators and designers of financial products. If we do not hasten to mitigate these impediments, we shall see an increase in financial exclusion in a world where financial inclusion is taken for granted.
According to Central Bank of Nigeria, CBN, 37% of Nigeria’s adult population are unbanked. This means that between 38-40 million Nigerian adults are unbanked, hence no relationship with a formal financial system.
This trend almost reflects the global scenario. According to the World Bank, about 30% of the world’s adult population are unbanked or financially excluded.
The COVID-19 pandemic changed the world. As the scourge ravaged villages, towns and cities, everything and everyone felt the harrowing impact. Businesses were forced to shut their doors. Countries closed their borders and in some places even towns and cities shut down.
The abnormal became the new normal. All over the world scientists struggled to find the origin and cause or causes of the COVID-19. These brave scientists were also battling to find prophylactics and even a cure.
It is an understatement to say that the COVID-19 scourge hit the world really hard. The poor were the most negatively impacted. Businesses shut down. Markets were closed. Jobs and livelihoods were lost. Money, food, drugs, and even water became scarce.
Everyone, including governments looked for how to survive. Governments advised their citizens to shelter in place. Somehow daily needs of people like electricity, hunger, bills and illnesses did not get that memo as they
continued unabated. People had to survive. Governments, rich businesses, philanthropic individuals and organisations came to the rescue.
Enter Fintech
Fintech which basically means technological innovations and tools for financial services saved the global financial systems from COVID-19. This mitigation by Fintech in the COVID-19 era also resulted in more tools to enhance financial inclusion at a time when everything else had gone out of sync.
Mobile banking and mobile money took over many of the roles of conventional banking systems as bank staffers were forced to stay home to avoid contracting and spreading of the corona virus. Governments discouraged face to face interactions but mandated social distancing measures and in some cases quarantine, especially for those suspected of exposure to persons diagnosed or in observation for corona virus. People coming into the country were mandated to quarantine. Sadly, we lost some of our colleagues to this scourge.
It could be said that COVID-19 and the attendant disruption of normal society has provided incredible digital opportunities for financial inclusion. Social safety net programmes of government in this COVID-19 era were made easier and reached a greater number of people due to fintech. I should note here that NDIC made some outreach, especially along the lines of its core mandates.
The safety nets and outreach by government and its agencies should be continued as the travails of corona virus persist to this day. Financial systems have experienced influxes because people who were hitherto excluded are now included. The impact should also reflect on enhanced efficacy, lower cost of service delivery and improved Gross Domestic Product, GDP.
Yes, we expect better life for the previously unbanked—women, rural dwellers, the poor and uneducated.
Conversely and as is typical with every new opportunity in the financial system, the ill-intentioned would also look for weaknesses and loopholes to exploit. The propensity for abuse is as huge as the opportunities in an improved digital financial inclusion regime. Predatory financial practices such as unscrupulous
lending, promise of unrealistic returns on deposits and stock manipulations are some of the malfeasance to watch out for by regulators and indeed the media.
Role of the media
As media practitioners the best gift we can bequeath to our nation is an informed electorate, a predominantly educated adult class, a responsive and responsible financial system. By doing these we can claim clean hands when we seek equity.
The above statement, to me, encapsulates our role as media practitioners. Media houses, traditional and social, should be in the forefront of digital financial inclusion, especially in the COVID-19 era and beyond. Newsrooms,
especially the business and finance desk should make knowledge of the rudiments of the financial system a prerequisite for journalists who ply their trade in that department.
I honestly believe anyone who works in our newsrooms should have a basic education in the workings of the economy. After all we are supposed to be versatile professionals. While we should encourage reporters to have some specialisation and expertise, given dwindling resources for our sector, especially in the COVID-19 era, we must be prepared to report on any beats we may assigned.
Being members of the 4th estate of the realm we are part of society’s elite. This means we are leaders in our own rights. And being leaders we have responsibilities to our country, our fellow citizens.
Financial education is not taught to everyone in school. From secondary schools to tertiary institutions, financial education is taught as an elective. It behoves us, therefore, as media practitioners to educate the general public on the basic rudiments of the economy. This naturally would educate the populace on the
benefits of financial inclusion.
Many in the rural areas do not have access to financial institutions. Most of the poor and uneducated in our cities do not care for financial institutions except where exigencies of work and others compel them to establish a relationship.
It is our responsibility to educate the general populace on the benefits of financial inclusion. It is our duty to, in collusion with regulators and financial institutions do a proper analysis of financial policies and products before they are introduced into the market. We should also question new innovations and
inventions by Fintechs and financial institutions.
The media cannot be limited to being only a bridge but also when occasions demand it be a buffer between the people, big TECH and financial corporations.
When there have been failures and abuse of the system by operators, should the media not be a mitigating influence? The answer to that question is best left for others, maybe ones with a different level of expertise. I can only say, look to your conscience, my friends.
Anyone who has been “marketed” in the past by banks and financial institutions about their services and products would agree with me that language is a huge problem of financial inclusion. On a few occasions I watched some beautiful young women try to explain their organisation’s services to me without understanding anything that was said. I am not sure if those who were “marketing” me understood what they were selling.
From “percentage base points, to bullish and bearish stocks,” I would in exasperation when I can afford it say, please sign me up as I hand over the least amount allowed. If I couldn’t understand these marketers I wonder how many of my less educated brothers and sisters could.
Colleagues, part of our role in financial inclusion, as media professionals is to break down the technical and sophisticated language of finance to the level of ordinary people. Hopefully we are already reporting in that language. Perhaps, we should go a step further to teach financial experts the language of the ordinary person. “Base points, bullish, and bearish,” is not the language of normal people.
Understanding cultural values and nuances in our traditional societies would further enhance financial inclusion. Certainly there are cultural barriers to financial inclusion but given that we are with the people, we are sufficiently
equipped to help surmount some of these barriers.
“The business of a business is business,” a wise man said a long time ago. This means that for a business to survive it must live its role. Put another way, a business must make profit to remain in business.
There may come a time when it will be better for the bottom line of financial operators to collude or circumvent the law to enhance returns on investment to their investors or shareholders. It is our jobs, no, responsibility to ensure that international best practices are observed, whether in the COVID-19 era or beyond. The collusions may even be between operators and regulators. We are duty bound to expose same.
The media should not be in the business of impeding genuine profits of investors, rather when we play our traditional roles of exposing sharp and predatory practices, corruption in the system, we are enhancing an all-inclusive environment that spurs growth and drives down costs. As watchdogs of society, it behoves us to discourage unhealthy monopolistic practices but rather encourage competition in the financial system. The ultimate beneficiary is the customer.
Our traditional role as media practitioners have not changed. The pandemic didn’t change it but became an urgent reminder to some of us who had forgotten our calling that if there was ever a time the media professional was needed, that time is now. To the faltering, rediscover your zeal. Your country, our people need you.
We shall continue to chronicle and inform on COVID-19 even after now. We remain the link between government, its policies, programs and our people. Sometimes circumstance may require us to set agenda for the government. As we advocate for the people, we may become catalysts of ideas and promoters of same. And as we seek to influence and shape factories of thought, let us from time to time take a look in the mirror. What we see is the society we have created.
Conclusion
There has been a lot of progress with vaccines and vaccinations to tackle COVID-19. However, uncertainty remains as the new normal is unknown. We as media practitioners should provide certainty, be a steady hand as it were, through our reportage. Our reporting on this pandemic, as in all cases, must be factual and based on science. We cannot be part of those on the fringe of society who promote unfounded conspiracy theories.
As reporters, editors, and media managers, we betray the people we serve and the ethics of our profession when we fuel misinformation and disinformation, maybe for pecuniary considerations, when we redistribute unfounded, baseless stories on COVID-19 on social media.
By now, we have all come to know that it is only a matter of time before items on social media make it to mainstream news outlets. Some of these stories eventually cost lives and livelihoods.
Back to the beginning
We must ask the question again: Is financial inclusion all about capturing the unbanked? When the unbanked have been captured what do you do with them?
Regulators such as NDIC and CBN must go beyond financial inclusion to what I call wealth inclusion. A bank account is just not enough. Government and regulators must come up with policies that will enhance a conducive
environment for talents of our youths, including the unbanked, to break through.
Our youths must be encouraged to let their imaginations run wild. Our financial systems operators should come up with innovations that would move our women, uneducated adults, poor rural dwellers from being dependants to becoming participants in wealth creation.
I acknowledge the palliative programmes of federal, state, local governments and agencies have been helpful during this pandemic. It is a good beginning. Just a beginning, nonetheless.
Any talk about an equitable egalitarian society without deliberate and aggressive set of actions to include the poor in wealth redistribution is a delusion of the citizenry. It is mass scam.
I am not asking for a socialist economy but it is my considered opinion that the more people we move from the column of have ‘nots’ to column of haves in our society the better our indices in all facets of human development.
Let us redistribute and grow wealth, not hand outs. That, I submit to you, ladies and gentlemen, is financial inclusion.
Thank you.