Olu Akanmu, a leading thinker on technology, digital identity and financial inclusion, painted a vivid picture of the gaps in financial inclusion in Nigeria and the urgent need for inclusive digital identity systems in a TED Talk delivered in Lagos a week ago.
His speech, titled “The Future of Financial Inclusion,” highlighted how unequal access to financial services helps economic disparity across regions, and why it is crucial for Nigeria to bridge this gap.
The Tale of Two Nigeria
Akanmu began by comparing the financial realities of different regions in Nigeria, stating that “Maitama is very different from Maiduguri in terms of prosperity and financial inclusion.”
He states that while the affluent areas of Abuja and Lagos enjoy a high concentration of financial services, regions like Sokoto and Maiduguri lag far behind.
According to data from the Efina Access to Finance report, nearly 47% of adult Nigerians lack a transactional or financial account, which translates to a quarter of the population being excluded from the modern digital financial system.
A modern digital financial system includes average Nigerians owning bank accounts, having access to easy investments, etc.
This financial exclusion became glaring during the cashless policy exercise, which left tens of millions of small business owners and artisans unable to trade.
Akanmu emphasized that economic inclusion programmes cannot succeed without financial inclusion, as those without financial accounts are unable to benefit from the digital economy.
The Link Between Digital Identity and Financial Inclusion
He also stressed the importance of integrating digital identity with financial services, citing that while Nigeria has made significant progress in building an inclusive digital identity system—with over 107 million Nigerians now having a national identity number (NIN)—the country has struggled to translate this into financial inclusion.
Only 65 million Nigerians currently have formal financial accounts.
“30 million Nigerians have digital identities but no financial accounts,” Akanmu noted, describing this as a “low-hanging fruit” for accelerating financial inclusion.
He argued that if Nigeria follows the model of countries like India and Brazil, where digital identity automatically links to financial accounts, the number of financially included citizens could rapidly increase.
A Coordinated Approach for Financial Inclusion
Akanmu called for a coordinated digital public infrastructure program that integrates identity and payment systems.
He highlighted how, in successful countries, the moment a citizen receives a digital identity, they are automatically granted a financial account. Such a system would not only boost financial inclusion but also make it easier to track and manage credit.
“When we have 100 million Nigerians with financial accounts linked to unique digital identities, no one will be able to disappear with credit,” Akanmu asserted.
This transparency would encourage lenders to offer more affordable interest rates, as they can accurately assess a borrower’s risk profile, unlike the current system where lenders assume the worst and charge high rates.
Currently, MSMEs (Micro, Small, and Medium Enterprises) in Nigeria face interest rates as high as 300% per annum, making it nearly impossible for them to access credit.
This hinders their ability to grow and reduces the overall economic influence they could have on their local communities.
Akanmu thinks the flow of credit can be greatly enhanced by connecting digital identities and financial accounts, enabling businesses to flourish and help reduce poverty and create jobs.
In his ideal future, millions of Nigerians will be able to escape poverty thanks to financial inclusion. “We will bring 100 million people out of poverty and into prosperity,” he declared, highlighting the fact that MSMEs become job creators and catalysts for local economies when they have access to credit at reasonable rates.
To bring this vision alive, Akanmu urged cooperation between the Nigerian Interbank Settlement System (NIBSS), banks, fintechs, and telecommunications companies, as well as the National Identity Management Commission (NIMC).
Nigeria can only achieve its objective of having 100 million financially included citizens by 2027 by making purposeful and well-coordinated efforts.
