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Digital Payments and Blockchain for Financial Inclusion in Rural Areas

Ibrahima Guimba Saidou — Minister Special Advisor to the President of the Republic Niger

CfC St. Moritz
CfC St. Moritz
6 min readApr 21, 2020

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Abstract

With a predominantly rural population, the Republic of Niger in West Africa is one of the most economically-disadvantaged countries on the planet. Many of the citizens live in far-flung villages that are incredibly difficult to reach or even locate.

According to the International Telecommunication Union, Niger is one of the most backward countries as far as the Internet and mobile connectivity is concerned. However, things are changing for good for this impoverished African nation. The bold decision to leapfrog and adopt digital solutions to achieve its sustainable development goals (SDG), in particular the promotions of digital payment and the introduction of blockchain, will accelerate both social and financial inclusion.

Limited access to financial services

In a world where over 1.7 billion people do not have access to standard financial services, simple things like opening a bank account or even having to manage their financial resources properly become very difficult. This large number of vulnerable people do not have access to conventional financial services and therefore cannot save nor borrow money. Also, they are not able to have access to good investment opportunities. Hence, they are trapped in a vicious circle and can never become financially empowered, which as a consequence deepens social issues such as poverty and unemployment. The ‘unbanked’ people, as they are called, unfortunately, fall into dire economic deprivation.

Regarding the Republic of Niger, today the vast majority of people living in rural Niger do not have access to conventional banking services. Given the size of the country and the low density of the population, Banks’ branches are opened only in the cities. Besides, bank charges are too high and expensive for most people in this poor country. This is the main cause of extremely low penetration. Customers in rural areas have to travel long distances on unpaved roads to reach their bank branches. In some cases, the insecurity that prevails makes the trip even harder to take as the risk of « losing » their money is high. Also, the high illiteracy and the lack of proper ID cards add to the burden of opening a bank account. Most people, therefore, refuse to go through such hassle to opening a bank account. As they are literarily discouraged to open bank accounts, needed to access the existing financial services and opportunities, the inclusion gap keeps widening for the villagers. Without a bank account, they have to solely rely on cash to carry out all their transactions. This increases the costs of transactions for these already poor citizens. Also often fake currencies are introduced and villagers are easy targets of thieves. Being unconnected makes it impossible for villagers to enjoy the benefits brought by the digital trend, for example, online trading through which the economy of scale is achieved and a broader range of customers is reached.

Connecting the unconnected — Smart Villages and Digital Roads

As hinted earlier, cryptocurrencies and blockchain technology could change the fortune of people in rural Niger for the better. With the deployment of digital currencies/wallets and blockchain technology, financial inclusion will be achieved and, economic opportunities will be available to a larger group of people. This will radically transform the rural areas of Niger, where most of the population lives.

And the government is already working on the transformation to link up rural areas with the use of information and communication technologies (ICTs) and connect the unconnected. The government can get this done through the implementation of the Niger 2.0 « Smart Villages » program, a program endorsed by the UN systems and by major development partners such as the World Bank, the African Development Bank and other bilateral and multi-lateral partners. Furthermore, it was decided to fully embrace technology and build «digital roads» across the whole country to bring services to its citizens regardless of their geographical locations. Famers and other stakeholders will benefit tremendously from the synergy brought by the « Smart Village » program as well as the now much larger potential customer base suddenly available to them. Subsidies programs to farmers can be better managed for the benefits of those that are targeted. For example, eVouchers will ensure that seeds or fertilizers end up directly in the hands of the farmers, not elsewhere as it is unfortunately often the case. Similarly harvest produced would be sold much easier and at better prices, as unnecessarily intermediaries will be cut off the chain and all transactions will be traced. That is why Niger is accelerating its « connecting the unconnected » program and is adopting blockchain for traceability and security, and digital payments to reach the masses, lower the costs of transactions and facilitate the financial integration of its rural population.

This «Marshall plan» alike program is needed to connect its people, cement national unity, facility service delivery, boosts internal and international commerce and thus bring true financial inclusion, with no one left behind.

Smart Village: Service Delivery Using Crypto and Blockchain

Farmers or villagers are not the only ones who will be able to take advantage of this new financial environment. Virtually everyone in the country will benefit from it one way or the other. Investors also will enjoy greater returns given the extremely low banking penetration (only 5.8% of the population has a bank account). Also, the government of Niger is taking necessary steps to attract foreign investment with for instance a favorable investment code including tax relief, and the adoption of laws and measures through the « Ease of Doing Business » initiative. Niger has gained 11 ranks in the latest publication of the « ease of doing business » results by the World Bank.

With one of the fastest rates of population growth in the world and ever-increasing Internet connectivity, the road is well paved for investment in digital payments and blockchain in the republic of Niger.

About the Author

Mr Ibrahima Guimba-Saïdou has over 20 years of professional experience in the telecommunications industries worldwide. His expertise is in strategy, operations planning and management, market sizing, product marketing, business planning, Sales and Market development. Ibrahima Guimba-Saïdou has been recipient of several CEO Awards throughout his career. He joined the government of Niger in November 2016 as High Commissioner (cabinet level position) in charge of ICT. He is in charge of the e-government strategy and its implementation, as well as enabling the ICT ecosystem.
Ibrahima Guimba-Saïdou has since July 2017 been appointed CEO of the newly formed National agency of information society (Ansi), reporting to the President of the Republic Office. He is also Minister — Special Advisor of the President of the Republic and a board member of Niger Telecom, the National Operator of Niger.
He has been appointed by the President as the Minister representing Niger on the Steering Committee of the Smart Africa Alliance.

APPENDIX: Sources of data

Giasetta
Cfcstmoritz
Crypto
Bitcoin
Blockchain

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CfC St. Moritz
CfC St. Moritz

Written by CfC St. Moritz

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