Tortoise, Fintechs and Central Bank of Nigeria’s Financial Inclusion Goals

Once upon an animal clime, the Tortoise was madly in love with the only daughter of the King. The problem is, the King does not want Tortoise, who is famed for his self-contentedness, to succeed him as King. Yet, he also does not want to offend Tortoise who has being the Crown Princess’ childhood heartthrob.

The King’s preferred successor was the Tiger.

The King happened on a plan.

Knowing how dead slow the Tortoise can be, he declared that the Crown Princess shall be bride to whoever wins the race up the mountains of the dwarf goats between the Tortoise and the Tiger.

Tortoise knew he had no chance against Tiger in terms of pace and speed. He, therefore, requested of the King that the race should start from the top of the mountain and end at its heels. The King gave his approval, especially as the Tiger doesn’t see how that can change the race outcome.

Tortoise approached his friend Elephant for one little favour. Incidentally, the Elephant has been chosen as the Referee to blow the trumpet from his trunk. Now, everyone knows the Elephant has a habit of stumping his hoof whenever he bellows.

On the day of the contest, the Tortoise appeared on the scene with the empty shell of his late grandfather tied to his tommy in an embracing fashion. The crowd laughed at him –  a man who cannot run when free now attempting to win a race carrying a dead-man’s shell. To make matters worse, Tortoise went and positioned himself behind the Tiger, at the foot of the Elephant. They concluded the oracle that advised him thus must have been struck by severe fever of the brain.

All set.

Elephant raised his trunk, gave a loud blast of a starting sound while simultaneously kicking Tortoise with his powerful hoof.

That kick lifted Tortoise and landed him just a few inches near the foot of the mountain where he simply rolled across the finish line to win the race even before Tiger has done half of the distance.

Now, you know the rest of the story.

What you may not know is what business the Tortoise may have in common with Fintechs and Central Bank of Nigeria’s goal of reaching Nigeria’s 60.1m unbanked populace with financial products by 2020.

It has become common knowledge that as at 2018, about 36.8% of Nigerian adults do not have access to formal financial banking services with 44.1 % being male and 55.9% female. It was also noted that about 71.3m Nigerian adults have access to mobile phone while a very sizeable number do not have a phone. The bulk of the unreached and under-served persons are found in rural and semi-rural areas with Northern Nigeria accounting for the largest numbers.

You may find that Mama Risi, from whom you buy vegetables at a roadside stall, does not have a phone not to talk of bank account. She may ask you ‘wetin I wan put inside bank account?’ But don’t be surprised to discover she contributes up to N5,000 in esusu each weekend.

Did I tell you Mallam Bello makes a return of up to a million naira at the end of each harvest cycle from Onion alone? No, I did not.

People like Mama Risi and Mallam Bello who farm your Onion in Birni-Kebbi make transactional payments majorly via cash in the informal market. They are inhibited by lack of tailored financial products, limited literacy, affordability and institutional exclusion.

Like the King in our story, CBN has set a goal of reaching the 60m financially excluded Nigerian adults by 2020. Seeing, however, the pace of marketing and distribution efforts of existing grassroots-focused Fintechs providers in the country, I dare say that the finish line is more feasible for the Tortoise than for us. Market players such as Firstmonie, Paga, PayNow among others are making efforts but most of these efforts seem to be concentrated among urban and financially included populace.

Prove me otherwise, please.

As someone who has been involved in successful rural marketing on several products, I can tell you that not much is being done in taking these products to the rural market as at date. The reasons are not far-fetched.

That very few of these products and marketing activities are being developed taking cognizance of the basic socio-economic characteristics and needs of the pre-identified unbanked segment cannot not be denied. Even Neighborhood banking and USSD that don’t require owning a bank account to access basic financial services are not been pushed aggressively. My guess is the players probably feel it may not be worth the investment. If this thinking is true, the mindset may be the first that need to be addressed.

The informal sector contributes about two-thirds of Nigeria GDP annually and the sub-sector we are discussing is worth one-third of these.

So, unlike the Tortoise, the service providers seem to have failed in that they are building their product and marketing tactics for the rural and semi-urban market from urban perspective instead of the reverse. Even where the products seem to fit, no effective kick-me distribution strategy has been executed as at date.

Every successful agricultural input marketer knows the best way to reach smallholder farmers is to position oneself closer to them as well as incorporating their involvement all through the demonstration process. In the same vein, for Nigeria Fintechs focusing on the unbanked to succeed in rural markets, they need to:

• Stay close to them by meeting them at their gatherings, markets and festivities;
• Incorporate influential local personalities;
• Recruit, train and engage educated locals in the execution process;
• Research clusters peculiarities instead of generalizing;
• Remove inter-village access and product cost bottlenecks;
• Engage high personal selling efforts;
• Enter each cluster of villages in grand-style;
• Weave your brand into what they respect and value to heighten their sense of pride in their heritage;
• Avoid and quickly deal with misconceptions;
• Empower the people;
• Drive brand loyalty and knowledge by corporate social investment;
• Adapt marketing mix to their specific characteristics; and
• Let them know what you have done for them.

The liberalization of the market to other non-banking service providers like telecoms should not only create more products but deepen the reach.

The mantra for rural marketing as always should be the 4As of RM covering affordability, availability, awareness and acceptability.

In my view, it may also help to treat semi-urban and rural consumers as separate segments owing to the later typically frowning at being urbanized while the former feel a sense of pride by same. Beside the two are similar to a limit.

This piece was inspired by conversations I have had with few players in the industry who have reached out for my service in pushing their brand into the market. My observations as well as interaction with these professionals left me with the impression that the goal of CBN, though worthwhile, may remain a mirage if bold investment is not the right part of this informal market.

As CBN review the timelines of that goal, I make bold to say that marketing efforts must be rightly focused by all existing and emerging Fintechs. It is not enough to roll out good products. We must quickly create and execute the right marketing tactics if we are to win the race like the wise Tortoise. Those who are fastest in thinking and responding like the Tortoise are likely to emerge with market leadership as the Bride.