The percentage of adult Nigerians with formal financial services – including bank accounts, insurance, and mobile money – rose to 64% in 2023 from 56% in 2020, according to EFInA, a UK government-backed firm working to deepen financial inclusion in Nigeria. But just 52% have a bank account, and more comprehensive adoption is hampered by widespread poverty in Africa’s most populous country.
Most of the people without an account are in the informal sector, especially farmers and petty traders in rural areas who are dealing with poor finances, inadequate cash flow, inadequate farming equipment, and a broken value chain.
Financial institutions are also not near these farmers and petty traders, making these people stash their cash in their backyards or inside their cupboards. Their unbanked status is further compounded by the tediousness of account opening processes. The farmers lack formal education and find it practically difficult to interpret information on the account opening forms.
To empower this category of unbanked and underbanked Nigerians, First City Monument Bank (FCMB) is taking banking services to their doorsteps through the user-friendly applications of its microfinance business and agency banking network. This creates sustainable growth opportunities for farmers and petty traders in peri-urban and rural communities.
In 2018, FCMB partnered with the World Savings and Retail Banking Institute (WSBI) to significantly boost its support for agribusiness in Nigeria. This strategic collaboration aimed to improve farmers’ access to finance and essential resources, fostering the growth of the agricultural sector and the overall Nigerian economy.
The memorandum outlined a framework to deepen agency banking, financial inclusion, and savings culture in the informal and agribusiness sectors, as the lender used its state-of-the-art technology and mobile banking solutions to drive the project mainly in the rural and sub-urban farm settlements where most farmers are based.
Interestingly, the project was completed last year and reached 2 million farmers across the entire nation. It involved the lender rolling out an integrated savings account (Kampee Account), which offered financial services to thousands of unbanked and underbanked farmers across five states (Kaduna, Kano, Nasarawa, Ogun, and Oyo) through agricultural agents operating under the bank’s agency banking proposition.
In 2023, FCMB and Jamborow, an emerging force in the technology ecosystem, announced a partnership to fast-track financial inclusion to enrich the lives of thousands of Nigerians living outside major cities. According to both parties, the partnership would accelerate the onboarding of underbanked and unbanked people living in rural and peri-urban areas on the platform of Jamborow, providing them with access to the financial services offered by FCMB, including loans.
Last year, FCMB, through its instant loan solution, FastCash, disbursed over 3 million loans totaling N105 billion to Nigerians from all walks of life. With no collateral or paperwork required, each loan of up to N200,000 was disbursed in under five minutes via the bank’s mobile app. Launched in 2018 and powered by state-of-the-art AI and machine learning technology, FastCash has become a popular option for Nigerians seeking quick access to funds.
It is clear that multilateral and development agencies have confidence in the ability of lenders to use its platform to extend loans to small businesses needed to accelerate economic growth.
This year, the United States government through USAID partnered with FCMB to facilitate $10 million in loans across Nigeria’s health and private sectors. The significant objective of the loan is to expand access to finance for underserved borrowers, women and youth, the health sector, and small and medium-sized enterprises throughout Nigeria.
It is important to note that the lender has a total of N2.21 trillion in loans and advances in its balance sheet as of March 2024, which is 20.1% higher than year-end 2023’s N1.84 trillion.
FCMB’s commitment to financial inclusion is evident in its multi-faceted approach. The bank is bridging the gap between the formal financial sector and underserved communities through agency banking, microloans, digital solutions, strategic partnerships, and targeted support for agriculture and SMEs. FCMB’s success, as demonstrated by its growing loan portfolio and impactful initiatives, showcases its dedication to fostering financial access and empowerment, ultimately driving a more inclusive and prosperous future for Nigeria.
