Mobile Apps are changing how Nigerians bank

As Kate Abiodun stretches to wipe off cobwebs from her half full provisions store, a customer strolls in. She hurries off the table she had mounted to aid her clean up exercise, to attend to the clean-shaved gentleman, who identified five items for purchase. In payment for the items, he pulls out his mobile phone from his breast pocket, punched some buttons and Kate’s bank account was credited. This is possible because of the “magic” of a mobile app. Glancing at the credit notification, Kate, who is 30, savours the security which this service affords; few months ago she had lost N120,000 to robbers as she tried to deposit the day’s takings at a commercial bank within the confines of Orile, home to a sizeable chunk of low income earners in Lagos.

Eliminating the risk of being robbed is one of the many upsides of having a bank account. It also saves time, boosts labour productivity, encourages savings and ultimately avails the convenience of financial inclusion. Despite climbing to 44 percent in 2014 from as low as 29.7 percent in 2010, financial inclusion in Africa’s largest economy is below levels obtainable in peer countries, according to World Bank data.

With just five Deposit Money Banks (DMB), South-Africa, which is Africa’s second largest economy, boasts of financial inclusion numbers as high as 70 percent in 2014, while in fast growing Botswana (with 11 DMBs) financial inclusion stood at 52 percent.

However, Nigeria’s 21 Deposit Money Banks (DMBs) are upping their game and latching on to the opportunities that high financial exclusion presents as they try to shrug off liquidity threats. Diamond bank rolled out the Beta Savings account in 2013 and in six months, 38,600 accounts were opened. The Beta account attracted about 2 million customers in six months’, a source at Diamond bank told BusinessDay. Guaranty Trust Bank, Nigeria’s largest bank by market capitalisation, also launched a similar digital app called the GT Easy Savers account. The account can be opened via a mobile phone with an activated Etisalat sim, as deduced from the bank’s website. “Bank congestion has reduced drastically because we have a renewed focus on meeting with customers outside the banking hall through the Easy savers account,” a source at GT Bank revealed.

Despite slumping to 46.3 percent in 2010 from 53.0 percent in 2008, a total of 39.2 million Financial Chart of the week adult Nigerians (46.3% of the adult population) were financially excluded in 2010.