Adoption of Digital Financial Services in Nigeria
The research project on Digital Financial Services (DFS) being done by Lagos Business School has revealed that adoption of DFS in Nigeria remains critically low among the under-banked and the unbanked population. The research identified the challenges of reaching such population being the lack of awareness, unemployment, complexity of financial products and services, access to finance and the proximity to financial service providers.
The research also showed that cost of financial services such as bank charges constitute a significant hindrance to financial inclusion. Most of under-banked and unbanked population are found in the South West, North Central and North West regions of Nigeria. The demographics are mostly female, both employed and unemployed, married and above 35 years of age. The group also had primary and secondary education and all live within the rural areas.
“DFS solutions are still lacking the required traction because they are only useful if there is scale and to achieve the scale they need to be inter-operable and relevant”, said Dr. Ignacio Mas, Executive Director and Co-Founder, Digital Frontiers Institute.
“Banks need to adjust their business models to accommodate trends that will lead to growth in the DFS space”, said Dr. Olayinka David-West, the Academic Director and Project Lead, Lagos Business School.
The research showed countries in emerging markets, such as Bangladesh, Pakistan, Kenya, Tanzania, Rwanda, Cameroon, Zimbabwe, DRC and Philippines beating Nigeria in active mobile money accounts despite having fewer mobile money operators.