Neighborhood Banking in Nigeria and its role in Financial Inclusion

Nigeria is Africa’s most populous country at 200 million with an unbanked population of 50M adults. The Nigerian banking system currently consists of 22 commercial banks, 942 micro-finance banks, 5 discount houses, 64 Finance Companies, and 6 development finance banks according to the latest stats by Central Bank of Nigeria(CBN). Mobile phones are increasingly being used for financial services in Nigeria and in a bid to make financial services more accessible,  in 2007, CBN laid out a 13 -year plan, a commitment to modernizing the country’s payment system by 2020 in order to encourage economic growth by providing safe and efficient infrastructure for making and receiving payments.

As a result, CBN has been rolling various schemes such as SANEF, Agency banking and also opening up space to non-financial groups by licensing Payment Solution Service Providers (PSSPs) to extend usage of digital payments platforms to all banked and unbanked Nigerians as well as all sectors.

Last year, Cellulant Nigeria Limited was granted a license to operate as a Payment Solution Service Provider in Nigeria having satisfied the stringent requirements of the CBN.  PSSPs are the companies that make up the underlying e-Payment infrastructure in Nigeria. Banks, Online Merchants, payment processors, merchants, state-governments and consumers connect to PSSPs to meet their electronic payment needs.

Following this licensing, Cellulant Nigeria has been rolling out Tingg Neighborhood Bankers Service (Tingg NBS)  

Understanding Neighborhood Banking in Nigeria

Customers at a Tingg Neighborhood Banking Kiosk in Adamawa, Nigeria

Customers at a Tingg Neighborhood Banking Kiosk in Adamawa, Nigeria

Neighborhood banking is a product conceptualized by Cellulant Nigeria to provide access to financial services in the country’s quest to achieve an 80% financial inclusion by 2020. Although Tingg NBS is similar to agency banking in terms of the financial services offered ( deposits, withdrawals, transferring money, payments and checking the balance), what distinguishes neighborhood banking from agency banking is that it does not require one to have a bank account. Instead, one gets a mobile wallet through which they can access basic financial services.

Neighborhood banking is being used by millions of Nigerians to access financial services. Businesses, banks, and government agencies leverage on Tingg to perform the last mile payment for farmers and the unbanked in the rural areas.

Financial inclusion in Nigeria and the Impact of Neighborhood Banking

This is the “mapified” story of how Cellulant Nigeria – in collaboration with Nigeria’s State, Local Governments & financial institutions – is parting the way to closing financial services access gap in Nigeria through the Tingg Neighborhood Bankers, starting from Adamawa.

This is a roll out map of Tingg Neighborhood Bankers in Adamawa. A collaboration between Cellulant Nigeria and Nigeria’s State, Local Governments & financial institutions in a bid to close the  financial services access gap in Nigeria

Increasing financial access points from the current 70,000 has been a priority for Nigeria’s Central bank. Due to the traditional banking system players being discouraged from investing in a country-wide branch network business due to the costs implications. Cellulant’s Tingg Neighborhood banking is bridging the access to financial services gap to the millions of Nigerians living in the rural areas.

All one needs to become a Tingg NBS customer is to have a basic feature phone or smartphone and  open a wallet account from which one can save, send and receive money, make payments and even access small loans all form these neighborhood kiosks (service points)

The Tingg Neighborhood Bankers Service (Tingg NBS) network was first deployed in Adamawa state at the beginning of June 2017. It has steadily spread across 22 states of the federation and has created over 700 jobs.