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African Development Bank (AfDB) has said it will work with microfinance banks to expand support for Micro, Small, and Medium Enterprises, MSMEs, and deepen financial inclusion in Nigeria through increased uptake of financial technology tools.
President of AfDB, Mr Akinwunmi Adesina, disclosed this in Abuja while speaking at the 7th annual symposium of the Nigerian Microfinance Platform, NMP.
Akinwunmi who was represented by the Director General, AfDB, Nigeria Country Office, Lamin Barrow, said microfinance and MSMEs are key to the economy and Job creation which is at the core of the bank and poverty reduction.
“But they need our support and so through our mediated support through Development Bank of Nigeria and others, we have supported about 20,000 MSMEs, but given the large number of MSMEs in Nigeria, this support is like scratching the surface.”
While commending the theme of the NMP Symposium ‘Expanding the Frontiers of Financial Inclusion through Innovation: The Microfintech Tools’, Akinwunmi promised that AfDB would work with all stakeholders to expand financial inclusion in Nigeria including through increased innovation and uptake of Fintech tools.
He said: “It is the bank’s belief that this symposium will help us to develop a more holistic understanding of the financial needs of underserved households and small businesses and develop ways to enhance access to affordable products.
“We are seeing the development of powerful new technologies and there is therefore the need to seek for ways to combine technologies in the way that moves the needle on financial inclusion.”
Also speaking at the symposium, Deputy Governor, Financial System Surveillance, FSS, Aisha Ahmad, challenged MFBs to recognise that MicroFinTech, which is Fintech applications, adapted to microfinance as a veritage tool for surpassing the nation’s financial inclusion target and hence come up with ways to deploy them to provide cost-efficient manner to microfinance clients.
“MicroFinTech sweeps that traditional cost structure away and can operate without huge overheads as the marginal cost of delivering software to a new user is near zero. By leveraging technology – smart phones, peer authentication and even the e-Naira, the cost of delivering a microfinance service drops sharply. And as the cost drops, the cost-benefit ratio improves and profitability increases,” she said.
Similarly, Managing Director/CEO, Nigeria Deposit Insurance Corporation, Mallam Hassan Bello, stressed the need for MFBs to come up with innovative products that will not only attract more people into the sector, but also restore truth and dignity to the people who are deficit in both through the disruption of mobile technology operators, and to keep expanding and cut cost.
He added that the corporation on its part is currently reviewing its framework for financial and technical support to the MFBs sector in order to bring it up to the contemporary business dynamics and after it is done, it will be more robust and accessible to eligible MFBs.
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