According to the World Bank, “Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.” About 2 billion adults around the world do not have a basic account and “more than 200 million formal and informal micro, small and medium-sized enterprises (MSMEs) in emerging economies lack adequate financing to thrive and grow.”
The Financial Inclusion Insights of 2015 showed that only about 2 in 5 Nigerian adults own a financial account while just 12 percent of Nigerians are aware of mobile money services. The percentage of active registered financial service users in Nigeria fell from 38 percent in 2014 to 33 percent in 2015. These figures indicate that the rate of poverty and economic inequality in Nigeria are still very high. They are bolstered by the high unemployment rate, lack of social safety nets, and mass illiteracy. To combat the negativity, financial institutions have to focus on creating solutions for the ‘unbanked’, that is, the people who do not have bank accounts, who are not familiar with new technology and have not warmed up to the idea of putting their money in the bank, mainly because they have no incentive to.
One way to solve this problem is to tap into Nigeria’s mobile/smartphone culture. Nigeria is said to have a mobile penetration rate of 81 percent. That doesn’t take into account individuals who use more than one mobile phone, however. But it is still a high figure for a country of roughly 200 million people. This means there are more mobile phones in Nigeria than there are bank accounts.
To tap into this culture to promote financial inclusion, Diamond Bank partnered with MTN Nigeria, which has a subscriber base of about 59 million and is the biggest mobile carrier in Nigeria, to create Diamond Y’ello.
Financial inclusion is not some gigantic unattainable goal. It is not without its challenges, but the solutions are not farfetched. As is obvious from Diamond Bank’s schemes, the road to global financial inclusion requires solution providers to look closely at the unbanked, study their habits, and then find ways to integrate technology into the things they are already comfortable with.
Through the Diamond Y’ello scheme, MTN subscribers can open Diamond Bank accounts from their mobile phones, whether or not they are Internet subscribers, simply by dialing the USSD code – *710#. With this code, subscribers can perform basic banking activities on their phone – they can make transfers, buy airtime, and pay bills, which is really what a lot of Nigerians need for starters.
Since this scheme was launched in August 2014, over 9 million MTN subscribers have opened Diamond Y’ello accounts. Although it has now been adopted by several other banks in Nigeria, Diamond Bank was the first to introduce such a scheme.
Recently, Diamond Bank rewarded two lucky customers with N2 million each for emerging the two millionth customers to open a Diamond Y’ello account and download, register and carry out financial transactions with its digital financial platform, Diamond Mobile app. One of the winners, Tasiu Mansur, who is a tailor in Kano and emerged the two millionth Diamond Y’ello active account holder tells us his story.
Watch the video below:
This report was sponsored by Diamond Bank