NEWSCLICK NIGERIA EXCLUSIVE: Why we’re yet to overcome financial inclusion challenge, banking the unbanked after nearly 130 years banking service berth in Nigeria – Union Bank Chair, Gumel

The Chairman of Union Bank of Nigeria Plc, Mr Farouk Gumel on Tuesday said Nigeria is still faced with challenges of financial inclusion and banking the unbanked even after the nearly 130 years that the financial services industry  berthed in the country.

Gumel explained that the challenges may persist longer than expected should decision by banks to shut down branches especially in rural areas continue unabated.

Newsclick Nigeria reports that the Chartered Accountant spoke on Tuesday as keynote speaker at the 15th annual Banking and Finance Conference themed ‘Repositioning the Financial Services Industry for an Evolving Glocal Context’ and organized by the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja.

Gumel stated that banks only served a fraction of the 200 million people in the country and the closure of bank branches due to inefficiency only reduced the amount of people they served.

According to him, efforts to drive financial inclusion in the country could succeed when banks have physical presence in rural areas for the existence of trust.

“We need more physical presence even though there is a lot of talk on the need to shutdown branches to be efficient, but it is about rebranching; you don’t need a big branch, you just need a rural branch that is targeted to rural people.

“This is because you need to be next to somebody to be able to convince him to trust you and I think that is how the banking sector should look at it. Efficiency comes, but you have to be inefficient when you are dealing with people in rural areas.”

“Our systems and processes have made it exceptionally easy for our elite to bank globally and for global elites to bank in Nigeria. Let me put it in a different way, an investor in Norway will find it easier to use a Nigerian bank than a farmer in Ningi Local Government.”

He said the neglect of rural dwellers in financial inclusion has led to a missed opportunity for Nigeria’s financial services industry to help create the growth that lifts us all to collective prosperity.

“This is why we are still talking about financial inclusion and how to bank the unbanked – after nearly 130 years since First Bank commenced operations in Nigeria.

“As leaders in banking, we are often drawn to focus on the latest global forces that are reshaping our industry; we connect with like-minded colleagues and debate how best to adapt the most recent global best practices and trends.

“We discuss how to address the challenges of the fintech revolution; we deliberate over how to draw the talent from a new generation that is more mobile and discerning in the workplace.”

Gumel praised the strength, ingenuity and resilience of the financial services sector which according to him has ‘’transformed Nigeria’s inefficient and analog financial services sector into a world-class system that has made it exceptionally easy for our local elites to bank globally and for global elites to bank in Nigeria.”

He also emphasized how the rapidly expanding agricultural sector in Nigeria has the potential to grow exponentially and contribute not just to the advancement of the Nigerian economy, but also the wellfare of the local farmers who form a large percentage of the unbanked.

He highlighted how Union Bank in its 105-year history continues to support the Nigerian farmer and pointed out that the recent integration with the parent TGI group has further opened up more opportunities for the bank to leverage international partnerships to service the rural economy.

He said: “At Union Bank, we are pursuing a range of strategic partnerships to build on the best of what we do here in Nigeria with the skills and resources abroad that can help us and our partners to grow. We do not seek to re-invent the wheel, we are looking to build on the best of what we have and provide support for a constituency that has the capacity to do so much more. We will do what we do best locally and then work with trusted international partners to deliver in the ECOWAS region, across Africa and around the world.”