By Alfred Ajayi
Growing up in the ancient town, Ara, in Egbedore Local Government Area of Osun State, banking was an exclusive privilege reserved for the relatively affluent. Only a handful of individuals, whether residing in the rural community or living in the cities, had access to financial services.
I vividly recall the pride my hometown felt in having a single branch of the now-defunct Savannah Bank – the only banking institution in the entire LGA at the time. It was an era where every transaction, no matter how minor, had to be conducted within the banking hall. Customers endured long queues, sometimes waiting for hours to deposit or withdraw money. The only exceptions to this ordeal were granted to those with personal connections to bank staff, the elderly, or the sick.
Sadly, the few, who had bank accounts were often viewed as more superior or wealthier, reinforcing a class divide that was more rooted in ignorance and illiteracy than actual financial disparity. Many unbanked individuals avoided formal banking not due to a lack of funds, but because of limited financial literacy and accessibility.
Just as Savannah Bank was striving to expand its customer base in Ara and its environs, disaster struck. The bank shut down operations nationwide, devastating my hometown’s only connection to the formal banking system. Customers including my beloved father lost their hard-earned savings, a reflection of Nigeria’s fragile and poorly regulated banking system at the time.
This collapse rendered many residents unbanked once more, with only a few privileged individuals managing to secure accounts with other financial institutions. However, accessing their funds became a daunting challenge, as they had to travel to neighboring cities such as Ejigbo, Ede, and Osogbo for even the most basic banking transactions.
Even when banks introduced ATMs, Ara was left out. The number of banked individuals in the community was too low to justify the deployment of ATM services. This forced residents to continue making inconvenient journeys to access financial services, sustaining a cycle of exclusion and hardship.
The real breakthrough came with technological advancements in the banking sector, driving financial inclusion and expanding access to formal financial services across Nigeria. The introduction of Point-of-Sale (POS) terminals revolutionized banking in Ara. Today, POS terminals are scattered across various parts of the town, offering seamless access to financial transactions.
While residents were still celebrating the convenience brought by POS services, the rise of mobile banking apps further transformed the landscape. These apps, provided by commercial banks and fintech companies, have enabled residents many of whom were previously unbanked to engage in digital transactions with unprecedented ease.
Now, from the palace of the Alara of Ara to compounds such as Bara, Iyalode, Otun, Sobaloju, and Aare among others, banking transactions occur with remarkable efficiency. The community has embraced financial technology, enjoying the ease and convenience once reserved for urban dwellers.
Yet, most people benefiting from these advancements are unaware of the underlying platform enabling this transformation – the secret is Digital Public Infrastructure (DPI). DPI is a set of foundational digital systems that enable seamless online interactions, transactions, and services across various sectors.
It consists of three major components – digital identity, payment systems, and data exchange. Digital identity is about a unique, verifiable identity system that allows individuals to authenticate themselves securely. In Nigeria, such include the National ID systems and BVN in banking. Payment systems talk about fast, interoperable, and secure digital payment platforms that facilitate financial transactions namely – mobile banking, POS etc. On its part, data exchange is a framework that enables secure and efficient sharing of data between institutions, businesses, and individuals. These include open banking, digital health records among others.
The banking evolution in Ara is a clear example of how DPI has reshaped financial access, streamlining payment systems and making banking services more accessible to all. Fintech companies, alongside commercial banks, have further revolutionized digital banking, making transactions seamless and effortless.
The story of Ara mirrors the reality of many rural communities across Nigeria, where DPI is gradually bridging financial gaps. However, challenges persist. Poor network connectivity remains a significant hurdle, exacerbated by the vandalization of critical telecommunications infrastructure. Additionally, educational disadvantages hinder many Nigerians from fully leveraging digital banking services. Coordinating the payment system across banks also presents challenges, though significant progress has been made in this regard.
Despite these obstacles, DPI represents the future – a transformative force that anyone passionate about progress must embrace. As Nigeria moves further into an increasingly digitized world, DPI is the foundation upon which inclusive, efficient, and resilient financial systems will be built.
Welcome to the DPI-enabled era.
Alfred Ajayi is a Journalist and climate change enthusiast, wrote in from Anambra.
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