Nigeria: Banking Sector's SANEF and Search for 40 Million New Identities

By Chijioke Nelson

The nation's banking sector is taking another big leap and responsibility with the Shared Agent Network Expansion Facility (SANEF), as it pursues the realisation of a plan that wholly reflects commitments to achieving the 80 per cent target on financial inclusion, in about 28 months from now.

SANEF, which difference lies with the fact that it is driven, wholly by banks, devoid of any government's financial interventions, is a scheme that has already brought the lenders to another unanimous position and strong belief in mutually beneficial goal. But mostly, it is part of the industry's contribution to the national project- Financial System Strategy 2020 (FSS 2020).

This is coming after the bankers, under the aegis of the Bankers Committee, in December 2015, agreed to pool together, five per cent of their respective profit after tax to pursue equity participation in small businesses and lending at single interest rate.SANEF is a project ratified by the Central Bank of Nigeria, owned by Deposit Money Banks, supported by the Nigeria Inter-Bank Settlement Systems (NIBSS), licensed Mobile Money Operators (MMOs) and the Shared Agents, with the primary objective of accelerating financial inclusion in Nigeria, through a renewed agent network arrangement.

Of course, banks' physical presence may not be possible in every nook and cranny. For example, despite high rating of Lagos State, the first financial institution was just opened this month in one of its suburb.The mobile agent network, which is at the centre of SANEF initiative, was long scripted by CBN to reach out to the rural mass, but has suffered a setback. It has now been to offer seamless basic financial services like cash-in, cash-out, funds transfer, bill payments, airtime purchase and government disbursements, under the new scheme.

The setback has basically stemmed from lack of shared services framework, necessitating individual banks to invest heavily on enabling infrastructure, resulting to duplications and increased costs of investments and possible rise in the cost of service to customers. Some banks were discouraged from investing in agent network business due to the costs implications.

SANEF and propositions

THE new initiative- SANEF, involves on-boarding 40 million new low income and unserved Nigerians into the financial system, increasing financial access points from the current 70,000 to 500,000 by 2020 and deepening access to mobile and digital financial products and services, such as savings accounts, micro loans, insurance and pensions by Nigerians.

The project seeks to deepen Nigeria's financial inclusion through an integrated ecosystem, with strong regulatory oversight, consumer protection and interoperable payment systems with limited concentration risk. It will create a platform for indigenous financial services companies to grow, while also empowering and creating jobs for Nigerians.So, wherever you see the SANEF sign, know that you can perform basic financial services such as account opening, cash deposits, cash withdrawals, funds transfers and bills payments.

Strategy and benefits

The Executive Director at Access Bank Plc, Victor Etuokwu, has described the new project as homegrown efforts, aimed at empowering Nigerians, not just for payment, but as part of strategies to expand the reach of the financial inclusion exercise, create opportunities for many, who have been excluded from the services all through the years.

The initiative would specifically reduced transaction costs, create convenience and increased adoption of digital financial services, as no less than 500,000 agent networks will be facilitated across the country, to achieve the set goals."Banking industry is now more determined to come out best and support the economy and that is the drive behind the initiative. We must be careful not to be preyed upon, particularly, by those who only see value to be reaped off and not to be developed. We want our own experts to develop and benefit from their hard work, not to be overtaken by foreign mercenaries," he said.

There are currently nine operators, made up of three MMOs (Paga, Cellulant, eTranzact) and six Super Agents (Interswitch, Capricorn, Innovectives, Inlaks, Unified Payments and Xpress Payment). So far, N4.5 billion has been disbursed, amounting to N500 million per operator to raise 10,000 agents by each operator. It costs an average of N50,000 to set up each agent network.

A member of the Technical Committee of the Bankers Committee on SANEF initiative, Bolaji Lawal, said the agents would be deployed at all the 774 local councils, experience centres of telecommunications companies and markets.He said that a target of developing between 100,000 and 150,000 agent networks in the third and fourth quarter of 2018, has been set and there are training and certification ongoing and a plan to rev up shortly, the financial literacy and customer education programmes, which will run across print and electronic media.

The move will, invariably, create jobs, but more importantly, become effective approach to reaching millions of the unbanked in the rural areas, as the agents are incentivised with N100 commission for every new identity registered under the Bank Verification Number.Besides, the agents, being equipped technologically, will seamlessly enlist new entrants in about two minutes, thus eliminating time wasting and the ensuing discouragements, while they would also provide banking services at cheaper costs.

Barring unforeseen circumstances, from October 1, there would be a rollout of SANEF projects, designed for national spread, which would include a designed savings account, bundled with an array of features (insurance, pension, micro credit).This will create a pull factor, to attract the financially excluded into the system, as they see value in micro retail loans, micro retail savings, retail insurance, micro pensions.