What's driving agency banking in Nigeria?

Nigeria's low-banked population ratio presents a unique opportunity for the financial industry, with agency banking playing a significant role in the evolution of financial services in the country. The concept of agency banking has gained popularity in Nigeria, with various retail outlets serving as access points for individuals to conduct financial transactions. This trend reflects the growing demand among Nigerians for easy, fast, and affordable financial services. Traditionally, the options available to consumers were limited to ATMs and bank branches. However, the emergence of agency banking has provided a convenient alternative that is increasingly preferred by customers due to its efficiency and cost-effectiveness. The CEO of Teamapt, Tosin Eniolorunda, sheds light on the current state of agency banking in Nigeria and its future prospects. Eniolorunda points out that agency banking has become pervasive across Nigeria, with a multitude of retail outlets offering financial services to consumers. The convenience and accessibility of these services align with the preferences of Nigerians, driving the popularity of agency banking. Eniolorunda also emphasizes the role of digital initiatives such as the in-air, a digital currency introduced by the government, in further promoting financial inclusion and supporting monetary policies. The collaboration between banks and fintech companies is crucial in advancing financial services in Nigeria. With over 200 fintech companies operating in the country, Eniolorunda highlights the complementary nature of banks and fintech firms, each bringing unique strengths to the partnership. While fintech companies excel in leveraging technology to deliver financial services, banks provide regulatory assurance and trust to customers. Eniolorunda envisions a future where successful players in the industry integrate technology, regulatory compliance, and customer trust to emerge as leaders in the sector. Teamapt, a fintech company, has achieved significant success in facilitating digital transactions, with monthly e-transactions totaling 1.4 trillion Naira. This accomplishment reflects the growing adoption of digital channels for financial services in Nigeria. Teamapt's broad customer base of 14 million individuals highlights the impact of fintech companies in reaching underserved populations and enhancing financial inclusion. Eniolorunda emphasizes the company's commitment to extending its services to unbanked individuals and expanding access to financial products, including credit facilities. Addressing concerns about the viability of offering loans and credit to low-income individuals, Eniolorunda underscores the importance of leveraging alternative credit assessment methods to cater to underserved populations. By utilizing advanced data analytics and understanding customer behavior, fintech companies like Teamapt can offer affordable and accessible credit options to individuals who have been excluded from traditional banking services. Eniolorunda argues that financial exclusion is not solely linked to poverty but also to limited access to financial institutions, emphasizing the potential for fintech companies to bridge this gap and provide inclusive financial solutions to a wider audience.