Diamond Bank: The Silver Lining for Financial Inclusion in Nigeria

Two key factors which separates the rich from the poor are the decisions they make about finance and access to credit. Consequently, tools and products focused on savings, credit history, low-cost loans, ease of transaction, and options such as mortgages – all of which are elements of retail banking, are crucial to lifting people out of poverty on a massive scale. Simple tool such as bank account means one can receive payment from anywhere in the world without wasting time to physically go collect it. This frees up more time and energy for productivity. An active bank account means the owner, whether a farmer in a rural area or a businessperson in the city, with a healthy balance sheet can access loans to boost productivity and earn more. And a tiny app on your smartphone, or a proxy financial agent or ATM, means the end of needless hours spent in banking halls to make transactions. Banking tools are empowering and thus lead to financial liberation. It is no coincidence that the number of Nigerians without access to financial services in Nigeria, at 70 million, almost equals the 80 million Nigerians living in extreme poverty. There is obviously a correlation and this reality places a huge responsibility on banks as major players to facilitate economic development in Nigeria.

It is to this end that the Central Bank of Nigeria in 2012, under its National Financial Inclusion Strategy (NFIS) set a target of financial inclusion rate of 80 percent for Nigeria’s adult population by 2020. The CBN initiated the move, actively pushing for more citizens to enjoy access to formal financial services and thereby increase their chances of financial empowerment.

Diamond Bank, since its inception in 1990, has always been about retail banking, financial inclusion, and catering to the finances of ordinary people. Currently, we by a wide margin lead others in financial inclusion, thanks to our innovative efforts, growing the market share by offering 10 million, previously unbanked individuals, financial services. In recognition of our efforts, we were voted “Best Bank for Financial Inclusion” in Nigeria in last year.

Diamond bank has targeted campaigns for Nigerians living in remote parts of the country. One of the campaigns, exclusively targeted at financially excluded people, helps to put faces on Nigeria’s unbanked. While so much has been said about financial inclusion, many people often don’t know what people who need to be banked look like. Diamond Bank partnered with African telecommunications giant MTN to roll out its hybrid savings account, Diamond Yello account. This service combines both financial and telecommunications functions.

Diamond Bank was one of the first Nigerian banks to employ the use of the Unstructured Supplementary Service Data (USSD) for its Yello account, allowing users to open Diamond bank accounts and carry out financial transactions on their mobile phones, without data or credit. Since its launch in 2014, before commercial banks were forced into retail banking, the Yello account has been able to register more than 9 million bank accounts consisting mostly of young people, and women (women are the demographic most hindered from financial inclusion; the Diamond Yello account has solved that conundrum in Nigeria) in northern Nigeria whom have never owned a bank account. Presently, Diamond Bank controls a large share of USSD transaction volume in Nigeria with 40 percent.

Nigerians have benefited from these innovative products. One of them is Tasiu Mansur, a tailor in Kano who received 2 million naira from Diamond Bank in 2016, for being the 2 millionth Nigerian to open a Diamond Yello account and was also featured in a documentary.

For someone who admitted to have never stepped foot in a banking hall before, opening a bank account and receiving 2 million naira for it enabled him to rent a shop, purchase equipment, and hire staff, thereby creating a value chain in that part of Nigeria that has been synonymous with high unemployment.

Another of Diamond Bank’s important service is geared towards SMSEs. Its Emerging Business Installment loans gives SME owners, who are looking to expand their businesses, financing for up to 3 years to purchase fixed assets that would help. The bank also helps with financial advisory services for these small businesses thereby enabling them to scale.

One of its most innovative products is its mobile app, which was also voted the Mobile Banking App of the year by Nigerian foremost business magazine Business Day in 2017, for the second time in a row. The bank’s mobile app has 2 million subscribed users, mostly Nigeria’s increasingly digitally-savvy youth, helping them to access some of the bank’s services and giving them inclusiveness into the Nigerian banking system.

While the Diamond mobile app harnesses digital technology in smartphones to bank Nigeria’s youths, the Diamond Yello account harnesses mobile phones and USSD to bank the less digital-literate in the informal sectors of the country. Diamond bank’s solutions to financial inclusion have solved two of its key problems; instilling trust in banking institutions, and bringing the bank closer to the people, and has made its over 10 million retail customers much happier.