Like any other country, Nigeria has its problems. However, Nigeria perched now as Africa’s “Golden Child” with a GDP of $510 billion, ballooning past South Africa who has numerous economic challenges ahead.

On the continent and Africa’s two leading economies, the poor seem to be left behind. As with winning the lotto, the winning is not as exciting as really knowing what to do with the money. So it is with Nigeria. A booming economy, globally recognised businessmen who are leading investor sentiment and attracting FDI to the country, Nigeria is an ‘investors pick’ these days.. Then there is Boko Haram and the constant threat of terrorism that has reached the heart of Nigeria in the city of Abuja.

The real theme of Nigeria’s next challenge rest on the unbanked. The world’s challenge in this same category is the 2.5 billion unbanked adults, most of whom are women. These are the ones that need inclusion and access to the financial system that will expose the advantages of economic freedom and empowerment, self-actualisation. It goes without saying that technology has yet to report the success envisaged in this space of bragging rights.

The first mobile money service was launched in Nigeria in 2011 but, so far, there has been little mobile money adoption. InterMedia Financial Inclusion Insights (FII) Tracker Survey of Nigeria, conducted in fall 2013, measured mobile money usage at a paltry 0.3 percent of the Nigerian adult population (2.6 million). The Nigeria FII Tracker Survey, and a recent study by MicroSave’s Helix Institute of Digital Finance, identified some of the likely reasons for mobile money’s limited uptake, including:

– Lack of knowledge among consumers about how to open a mobile money account.

– Low levels of trust in mobile money’s performance and safety.

– Unstable mobile networks.

– Ineffective agent training and management, leading to a lack of proper monitoring and operational support for agents.

– Lack of business incentives for MNOs to fully invest in mobile money partnerships with banks

To this extent, Nigeria’s banking system continues to face strong headwinds in two areas, revenue and the cost of business and commercial banking. It may seem as though the banking industry shrunk between 2004 and 2014 due to massive consolidation in the market, however, these mergers and acquisitions (M&A’s) actually represented approximately 60% of the organic growth for the remaining (stronger) banks. There is also the trickle-down effect from the 2008 recession that left many banks in Nigeria exposed and most of whom have closed. The market however has solid growth for “inclusion growth.”

The new feature of market development and competition sees the quality of service and customer experience is shaping the competitive. Nigeria retains around 30.8 million active bank account holders in Nigeria (or 35 percent of the Nigerian adult population). “Advances in technology have allowed [Diamond Bank] to target 56 million economically active, but unbanked Nigerians,” says Cathleen Tobin, manager, product research, marketing and financial education, at Women’s World Banking.

“Our view is that the greatest opportunity to grow revenue will not only come from just new markets or products, but also from the ability to deliver a high quality and a differentiated customer experience,” says Ayodele Othihiwa, Partner and Head of Financial Services for KPMG in Nigeria.

“Keeping current market share is critical, but growing it is even more so, which is why tapping into the unbanked Nigerian population becomes a crucial element for the industry to explore going forward,” indicates Othihiwa.

Practically there are correlations between access to finance, economic growth and poverty alleviation, and it is supported by the Federal Government, who in October 2014 divulged intentions to explore the network of the Nigerian Postal Service to reduce the unbanked population in the country to 10% by 2016.

Othihiwa reverbs: “This is certainly a very aggressive target by the Federal Government if we consider that in 2012 approximately 46.7% of the adult population of the country (+/- 90 000 000 then) was unbanked. Even if we work off this number – as the latest available statistic – the Federal Government is talking about reducing 40 000 000 unbanked to 9 000 000. To do this, even within three years, is not an easy task. That said, the target is attainable.”

KPMG fully understands these challenges and holds the sentiment, described by Othihiwa, “Currently the national Postal Service has approximately 5000 branches, which presents a great opportunity for access points that can be leveraged – particularly in areas where the banks may not have a physical presence currently. However, there will be plenty of challenges to getting this strategy right.”

This leads to necessary programmes in the following areas;

• Capacity building – up-skilling employees to be efficient in Financial Services will need to be undertaken, taking into consideration the recent customer-centric approach the banks are striving will mean intense training and skills development

• Technology – technology and networking will be critical and as such, a full scale collaborative system will need to be built, managed and rolled out nationally

• Infrastructure – access to adequate and reliable infrastructure will be paramount including power, transport and bandwidth (internet access) – particularly in rural areas

• Consumer education – education is critical not only on financial services and banking services but also around personal information protection. Banking is based on trust – and trust must be built in these regions and communities.

“These are just some areas that need consideration, along with who will supervise the National Postal Service – for instance, will it be the banking or telecoms industries? There will need to be clear guidelines and level of responsibility for the system to have any chance of success,” adds Othihiwa.

“Leveraging on the National Postal Service is certainly not a bad strategy to tap into the unbanked population, however, perhaps it shouldn’t be the only strategy. For instance, Nigeria has a mobile money strategy, though currently this isn’t being implemented, which is limiting – but if we consider the trends and numbers around mobile penetration and rapid adoption, it may be something worth relooking?”

“Overall, I believe Nigeria will see a dramatic decrease in the unbanked population, however, I don’t believe the 10% of the population by 2016 target is obtainable – not solely based on the National Postal Service strategy, but perhaps though a collaborative strategy that includes mobile money or mobile banking, this target just may be  attainable,” concludes Othihiwa.

Given the fact that Nigeria has even greater challenges, their real intention is inclusion. This from a country with a large proportionate of unemployed, unbanked, but ready for market options, KPMG sees this potential.

Again, Nigeria is pitching for the top of the African podium.