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On a daily basis, consumers fall victim to issues like lack of grievance redressal, misleading ads, and outright frauds and scams

> Posted by Sola Salako Ajulo, President and Founder, Consumer Advocacy Foundation of Nigeria (CAFON)

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In fewer than twenty years, our concept of a market has evolved from a strictly physical location of commercial activity, to also include intangible, real-time e-locations. Research shows that up to 12 percent of all global commercial transactions now take place on the Internet – within and between countries, often across multiple currencies, and with little or no physical contact between seller and consumer.

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Data from InterMedia reveal stagnant progress across key financial inclusion indicators in Nigeria

> Posted by Nadia van de Walle, Charles Wanga, and Ridhi Sahai, Financial Inclusion Insights, InterMedia

The number of adults who are considered financially included in Nigeria has not improved since 2014, according to InterMedia’s Financial Inclusion Insights (FII) 2016 Annual Report and Survey Data. The survey defines financial inclusion as adults with a registered account at a full-service financial institution. Financial inclusion in Nigeria dropped slightly from 37 percent in 2015 to 35 percent in 2016 (Figure 1), lagging behind the three other African countries surveyed as part of the FII program. In 2016, FII data showed 69 percent of Kenyans, 54 percent of Tanzanians, and 40 percent of Ugandans were financially included.

InterMedia recently completed and published the 2016 Annual Report and Survey Data on the status of financial inclusion in Nigeria. The report, based on a nationally-representative survey of over 6,000 Nigerian adults, provides insight into Nigerians’ financial lives while tracking trends in attitudes, access, use and demand for financial services.

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With an economy that is large enough to account for almost a third of Africa’s total GDP, why might Nigeria be lagging its peers?

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Designing a mobile money product that meets client needs while bringing tangible benefits to the financial institution

> Posted by Habiba Balogun, Habiba Balogun Consulting

The following is part of a blog series spotlighting views from participants in the Africa Board Fellowship (ABF). For more from Habiba, an interview with her can be found here.

With over 160 million mobile phones in use in Nigeria out of a population of 180 million, high mobile penetration is a major factor in the country in achieving seamless payments.

In 2016, at Accion Microfinance Bank (AMfB) in Nigeria, where I serve as a board member, we introduced a mobile banking product called Brighta 143. The product is USSD (unstructured supplementary service data), so it runs on both basic and smart phones, and it has shown great potential to expand financial inclusion as well as bring benefits to our institution.

But of course, rolling out a successful mobile money product is hardly straightforward.

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Key fintech trends include publishing open APIs, which helps to expand customer bases and improve services offerings 

> Posted by Geraldine O’Keeffe, Chief Innovation Officer, Software Group

The following post is part of a blog series spotlighting perspectives and experiences from the Africa Board Fellowship.

Access to financial services in Africa is on the increase, up 10 percent from 2011 to 2014, according to the Global Findex. This change can largely be credited to digital financial services. New entrants to the financial sector such as telcos, fintechs, and in the near future bigtechs like Facebook and Google are all offering technology-centered financial services that are changing the landscape and posing a competitive threat to traditional financial services providers (FSPs). At the same time, new technologies can allow traditional FSPs to expand their outreach and radically improve operational efficiency.

Considering both challenges and opportunities, now, more than ever, financial institutions of all stripes have to accept that technology and innovation are integral to their business strategy. These changes require a shift in culture throughout the institution and among the leadership. Board members, for example, have to embrace this change, understanding the current industry trends, experiencing these financial innovations firsthand, and taking concrete actions.

Through our work with board members of financial service providers in the Africa Board Fellowship program, we have identified three key fintech trends especially relevant for institutions in Africa focused on financial inclusion.

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> Posted by Carmen Paraison, Senior Program Associate, Africa, the Smart Campaign

Nigeria has an ambitious target of including 70 percent of its population in the formal financial services fold by 2020, from a baseline of 44 percent with access to an account in 2014. But financial inclusion involves a lot more than account access. The Center for Financial Inclusion defines financial inclusion as a state in which all people who can use them have access to a full suite of quality financial services at affordable prices delivered by a range of providers in a competitive market with convenience, dignity and consumer protections, to financially capable clients. Protection for consumers is an important part of that definition, and I recently had the opportunity to visit Lagos to learn more about consumer protection challenges in the country. In particular, I wanted to see how Smart Certification can help Nigeria reach its financial inclusion goals in a way that provides benefits to customers.

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AXA shares insights on and solutions to women’s unmet insurance needs in emerging economies.

By Garance Wattez-Richard, Head of Emerging Customers, AXA Group

Women-focused insurance solutions are a central part of AXA’s Emerging Customers work. In our SHEforSHIELD report, launched with the International Finance Corporation in 2015, we found that the market is growing quickly, as women become more risk-aware and willing to invest in protection. We conducted focus groups with women in Indonesia, Nigeria, and the United Arab Emirates (UAE) and learned that women have very specific, yet unmet needs when it comes to insurance. I am happy to share the stories of three of the women we met on our customer insights journey, diving into their fears and desires and the role that inclusive, women-focused insurance solutions could play.

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> Posted by Carmen Paraison, Project Associate, the Smart Campaign

The views expressed in this post don’t necessarily reflect those of CFI.

The Development Bank of Nigeria (DBN) was conceived in 2014 and this year it has come into fruition with the green light from the Federal Executive Council on April 5th. The only step standing in the way of disbursement of funds is the required approval from the National Assembly. With $1.3 billion in its coffers, the new development bank aims to spur economic development by increasing access to finance for micro, small and medium-sized enterprises (MSMEs) through relatively lower interest rates compared to commercial banks, and relatively longer loan repayment periods.

The DBN will serve as a wholesale bank to microfinance banks (MfBs) which will in turn provide medium and long-term loans to MSMEs. It will provide loans to all sectors of the economy including manufacturing, the services sector, and other industries not currently served by existing development banks, thereby filling an important gap in the provision of finance to MSMEs.

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> Posted by the Smart Campaign

The Center for Financial Inclusion at Accion announced today a $4.4 million, three-year partnership with The MasterCard Foundation to tackle the challenges facing consumer finance in an increasingly digital world. As a reader of this blog, you’re almost certainly familiar with the work of the Smart Campaign. The Smart Campaign is a global campaign committed to embedding client protection practices into the institutional culture and operations of the financial inclusion sector. Since 2009, we’ve worked globally to create an environment in which financial services are delivered safely and responsibly to low-income clients. The partnership marks a shift in strategy for the Smart Campaign, as well as a deepening of its footprint in Sub-Saharan Africa.

To date, the Smart Campaign’s flagship certification program has certified over 68 financial institutions, serving 35 million clients worldwide. Recent certifications include Opportunity International Colombia, ENLACE in El Salvador, and BRAC Bangladesh, part of the world’s largest anti-poverty organization.

Under the partnership, the Smart Certification program will continue. But with support from The MasterCard Foundation, the Smart Campaign will increase its focus on convening a broader range of players in the financial services field—including regulators, industry associations and financial technology firms—to take on client protection issues emerging from new technologies, to elevate the voice of the clients they serve and to effect change at the national level.

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> Posted by a Nairobi-Based Consultant

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Kenya and Nigeria are often heralded as two of the most dynamic economies in Africa. They could soon have something else in common: interest rate caps.

Banks in Kenya have urged President Uhuru Kenyatta to dismiss a new bill which caps loan interest rates and provides for sanctions (fines and prison) directly to the CEOs of banks that fail to do so. This is not the first time such a proposal has come forward; the last one having come at a time the incumbent president was Minister for Finance. Should the President sign off on the bill it will become law, and lending rates will be capped at 400 basis points above the Central Bank discount rate which now stands at 10.5 percent.

Understandably, the prospect of such limits has caused anxiety amongst lenders. Through the Kenya Bankers Association, Kenya’s bankers immediately lodged appeals to the government arguing that capping interest rates is counterproductive and against the free market economy premises Kenya enjoys. We are yet to see how the financial markets react.

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> Posted by Lizzy Bolze, CFI Analyst

Africa Board Fellows at the HBS-Accion Program on Strategic Leadership in Inclusive Finance. Pictured left to right: Felix Achibiri, Fortis Microfinance Bank, Nigeria; Titos Macie, Socremo, Mozambique; Elijah Chol, South Sudan Microfinance Development Facility; Charles Njuguna, Faulu Microfinance Bank, Kenya

It seems almost commonplace for financial institutions across sub-Saharan Africa to be confronted with currency devaluation, interest rate caps, political conflicts, increasing capital requirements, and disruptive technologies – not to mention the impact of wars, disease, climate change, and natural disasters. With all these complications and risks, I am left to wonder how can boards of financial institutions in Africa focus on anything other than constantly extinguishing crises?

In March, alumni of the Africa Board Fellowship (ABF) attended the HBS-Accion Program on Strategic Leadership in Inclusive Finance. During the weeklong executive education program, CFI staff had the opportunity to sit down with the four fellows pictured above to discuss some of the challenges they are facing.

A common challenge was the hardship caused by currency devaluations. MFIs often receive loans in U.S. dollars, and so as the value of local currency diminishes, squaring their balance sheets becomes increasingly tough. Elijah Chol of South Sudan reported that the Minister for Finance and Economic Planning announced a 500 percent devaluation of the South Sudanese Pound last December. At the South Sudan Microfinance Development Facility’s annual meeting a day later, the board was unable to take immediate action because the devaluation was so unexpected. Though prices in South Sudan’s market have since improved slightly, the impact of such extreme devaluation has posed great challenges across the microfinance sector.

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Credit Suisse is a founding sponsor of the Center for Financial Inclusion. The Credit Suisse Group Foundation looks to its philanthropic partners to foster research, innovation and constructive dialogue in order to spread best practices and develop new solutions for financial inclusion.

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The views and opinions expressed on this blog, except where otherwise noted, are those of the authors and guest bloggers and do not necessarily reflect the views of the Center for Financial Inclusion or its affiliates.