Women. Farmers. Entrepreneurs. The people who need loans in Nigeria are the same groups that have been underserved around the world.
Bunmi Lawson has spent her career building a more equitable and prosperous society in Nigeria. For the past decade, she’s served as Managing Director and CEO of Accion Microfinance Bank in Nigeria. Under her direction, the institution has grown from one branch to nearly 50 and helped close the gap in access to financial services in Nigeria.
As she prepares to retire from this role next month, Ms. Lawson shares insights she’s gleaned during her time at Accion Microfinance Bank and looks to the future as the work of financial inclusion continues.
Q: What initially drew you to work in financial inclusion?
A: Following my MBA, I sought roles that created significant social impact as well as offered a rewarding and exciting career. I initially joined a business advisory nonprofit that focused on reducing Nigeria’s massive number of unemployed youth by supporting them create a viable business. However, after all the business training, linkages to markets, mentors, access to finance remained a key challenge. Most of these youths didn’t have a bank account and this followed a history of even their parents not having access to financial services. It made me realize that financial exclusion was an even more widespread issue, and it was about the same time that Accion visited Nigeria to carry out a feasibility study on setting up a microfinance bank in Nigeria. I met Alfred Nicayenzi and Beth Rhyne, with their passion for microfinance, the track record of Accion globally, the significant impact achieved in transforming lives though financial inclusion, and I knew I wanted to be a key part of driving access to financial services in Nigeria.
Q: In the past decade, how have you seen financial inclusion change?
A: At the time we started, the word was microfinance not financial inclusion. Accion Microfinance Bank was one of the first formally licensed microfinance banks. Prior to that most were set up as informal or nonprofit microcredit lenders. Over the past decade, we have seen significant changes in the number and types of financial services and channels available to those previously financially underserved or excluded. The industry has grown to offer loans, savings, insurance, and payment channels both face to face and through digital channels. In Lagos and the south west we have achieved the targets of the government, reducing the number of those financially underserved to less than 20 percent. However key challenges of penetration still exist in rural areas especially in the Northern parts of Nigeria where EFiNA reports that in the North West geopolitical zone up to 70 percent of the population is financially excluded.
Q: There is a global gender gap in access to financial services. How does financial inclusion work to bridge that gap?
A: Accion Microfinance Bank has 68 percent of its clients being female. We ensure that, as we design our products, they are gender-friendly and take particular interest in ensuring that women can use our products easily and without fear. This is done through training our account officers and also ensuring gender balance within our account officers. We are currently developing gender-specific products as we go into the rural areas and the northern parts of Nigeria.
Q: What role does entrepreneurship play in financial inclusion in Nigeria?
A: Nigeria is a very entrepreneurial country. A large proportion of the Nigerian adult population desires to set up and own their own business. In recent times, we have seen a number of fintech companies being established in Nigeria and set up by Nigerian entrepreneurs. KPMG reports that “Investment in Nigerian FinTechs over the last 2 years exceeded the $200 million mark.” These firms provide the technology and innovation, which when they partner with microfinance, would drive financial inclusion. That entrepreneurial spirit of the average Nigerian I hope will lead to great uptake of digital financial products.
Q: Nigeria has one of the largest economies in Africa, and it continues to grow. How can we ensure that this growth reaches traditionally underserved segments of the population?
A: Nigeria is the second largest country in Africa based on population size and second largest economy when measured by GDP. In 2016 population growth was 2.6 percent while the economy shrunk by 1.5 percent, according to the World Bank. In the first quarter of 2017 GDP growth was less than 1 percent. Bottom line: the economy is not growing fast enough to achieve GDP per capita growth. Providing financial services that meet the needs of people living with low incomes, in both urban and rural areas, can help them increase their incomes and over the long-term fuel economic growth.
Q: While still a major industry in Nigeria, the agriculture sector is struggling to keep up with a rising population. How can inclusive financial services enable farmers to expand their work and meet growing demands?
Improved access to finance could enable farmers to access new farming technologies, leading to improved yields, and better manage their incomes. With microinsurance, they are better able to weather setbacks and continue their farming activities faster.
Q: You’ve met many clients over the past 10 years. What are some specific client stories that have stayed with you and inspire you in your work?
A: Our clients are the reasons for all the work we do. One aspect I love about this work is the positive impact we see in creating “a brighter future” for our clients. I recall a client thanking Accion for making them “somebody,” i.e. they are now able to contribute to their family needs and their community. Mrs. Olufelo is one of our flagship clients growing her business from a few racks of clothes to becoming a wholesaler in textiles and sending her children to university, all from having access to finance. Our clients in the education sector, who also are growing their business while providing education to the next generation of Nigerians. There are so many of our clients, who through their hard work and having access to finance, have better standards of living, having the ability to take advantage of opportunities that they would hitherto have felt was beyond their reach. At Accion Microfinance Bank, what we give our clients is the ability to take advantage of opportunities. We open doors that may otherwise have been shut!
Q: The theme of Accion Microfinance Bank’s 10th anniversary celebration is “Building a Brighter Future.” What does that mean to you?
A: The 10th anniversary celebrations gave us the opportunity to showcase Accion Microfinance Bank, the bank we have built over the last 10 years, and how in creating this banking institution, we have given our clients a brighter life, a brighter future. Building this bank, starting as an 8-man team to over 1,000 employees, has been so fulfilling for me. We have changed the landscape in Nigeria when it comes to financial inclusion. The Accion brand, amongst its stakeholders, is seen as a safe, reputable, professionally run, award-winning financial institution. We have staff who are passionate about the impact they are having within the Nigerian economy and that they too have the opportunity to work for a bank with a strong positive reputation and have been given the opportunity to develop their skills, both through local and international training programmes. We have also been able to positively influence the financial inclusion landscape in Nigeria through our work with the Microfinance Bank Association, our regulators, etc. So, building a brighter future is both about Accion as a leading organization and the impact we have had in the lives of our clients. It is also about continuity: assuring our stakeholders that we will continue to build and be committed to creating brighter futures for our clients. It was an opportunity to also showcase the handover to a new incoming Managing Director, showing that we have created a bank that is here for the long run.
Q: What do you see as the path ahead to reach full financial inclusion in Nigeria?
A: The challenge now is to reach scale and grow access to appropriate financial services at a faster rate than population growth. Innovative use of technology to provide better products and serve customers in a more convenient manner, reaching scale through digital channels, will play a significant role in advancing financial inclusion in Nigeria. We have seen supportive government policies, such as the Biometric Verification Number (BVN), movable collateral registry, credit bureaus, and open APIs. Recently the Central Bank of Nigeria (CBN) and The National Communication Commission (NCC) have signed an MOU to allow the mobile network operators to set up subsidiaries that will offer financial services. Government has also introduced policies to support startup fintech companies by granting tax holidays to fintech companies, subject to approval. With a stable economic climate, and continuity in conducive government policies, we should see various types of financial institutions providing services to more clients, with the mobile phone and digital financial products playing a key role in achieving financial inclusion in Nigeria. It is an exciting future…