It is estimated that the Bank Verification Number exercise which links customers with their biometric data like facial features and fingerprints generated about 25 million unique customers in Nigeria. Those 25 million customers accounted for about 45 million bank accounts in Nigeria.
The numbers are relatively poor for a country of more than 180 million people. For the banks to get their next 30 million customers, they need to improve their games.
This is what the banks have to do – they need to practice financial inclusion in the true spirit of it. They need to learn from what is happening in Tanzania.
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eKilimo
National Microfinance Bank Pic (NMB) has partnered with Mastercard with an aim to ensure the digitization of the agricultural sector in Tanzania with the rollout of eKilimo, a mobile solution developed by the Mastercard Lab for Financial Inclusion.
eKilimo, which in Swahili means ‘eAgriculture’, is a digital platform that will help, introduce efficiency, security and transparency in the agriculture supply chain. The solution will make transacting faster, safer, and easier for all stakeholders including the farmer, the buyer and the agent.
Powered by the digital platform developed by the Mastercard Lab, farmers are now able to conduct the entire transaction process of receiving payments and selling produce via a feature or smartphone, without having to walk hours to markets.
The Opportunity /Partnership
Using digital technology to provide access to farmers and introducing transparency to the buying and selling process will drive efficiencies into this supply chain, positively impacting the economy. In the long run this should help famers gain access to formal financial services and solutions, enabling them to manage their funds ensuring a better more secure future for them and their families.
The partnership between NMB and Mastercard will see the solution enter a pilot phase in select locations in Tanzania from March 2017. Following the introduction of the same solution in Kenya under the name of 2KUZE, key insights were gathered and will be used to ensure the Tanzanian pilot is a success. This cross pollination of knowledge driven by the Mastercard Lab ensures future rollouts are done so efficiently.
What Nigerian Banks could learn
The pilot will begin with the onboarding of NMB customers that source directly from smallholders. Field agents of the customers will use the eKilimo smartphone app to perform the purchase, including weighing the produce on a Bluetooth-enabled scale and paying the farmer digitally. The farmer will receive information and their payment from eKilimo, and will be able to leverage their transaction history to access credit from NMB.
Nigerian banks could do the same with many farmers union in the nation. Doing that will bring significant number of customers into the banking system. Through this mechanism they can attract the next 30 million customers faster than they had built the first 30 million which took many decades. Zenvus, a local agtech pioneer, has solutions to assist banks drive this opportunity.