Moses Ezekiel wobbled out of the forest on his old, rickety motorcycle. Dressed in African wax fabric, Mr Ezekiel looked exhausted and tired. The time was few minutes past 12 noon on a Sunday afternoon in the autumn of May.
The midday sun shone brightly, burning the skin with mild intensity. Mr Ezekiel told PREMIUM TIMES that farmers like him rest on Sundays, but he and a few others chose to work for the day to ensure a better harvest for the year. The 43-year-old would soon complain bitterly about the poor condition of life of farmers in the various agricultural settlements surrounding Ilaro, Ogun State.
"We work from morning till evening almost every day here but there is very little to show for it," Mr Ezekiel said. "Some of us come here even on Sundays. But our products are bought at very poor prices by those who re-sell in bigger markets. This is because most of our people know little about wholesale, retail and other financial issues. Again, those of us who know do not have good means of marketing our produce."
Ilaro is a town in Yewa South Local Government Area of Ogun State. It is home to numerous banks, companies, a popular federal polytechnic, among other important institutions.
Although Mr Ezekiel said he has no accurate data, he gave a rough estimate of local farmers known through various informal groups in and around the town to be over 200. This, he said, excludes others who help them on their farms during harvest. But, according to him, many of these farmers live in penury because they realise very little from the sale of their produce.
"The situation is even worse for farmers in smaller villages outside Ilaro," he said. He added that neither monetary support nor any other financial literacy scheme has been extended to them across the communities surrounding the town.
Another farmer who identified himself as Baba Funlola confirmed Mr Ezekiel's position in a separate chat with PREMIUM TIMES.
"Our goods are bought at poor prices and the government does not care about our welfare," he noted.
Like Mr Ezekiel, Baba Funlola identified the poor understanding of financial issues and lack of access to financial services as a part of the underlying causes of their poverty and frustration. These are some of the issues identified as stumbling blocks by the Central Bank of Nigeria in its financial inclusion strategy.
CBN's Financial Inclusion Policy
In 2012, the Central Bank of Nigeria (CBN) adopted the National Financial Inclusion Strategy (NFIS). The NFIS was built on four strategic areas of agency banking, mobile banking/mobile payments, linkage models and client empowerment. Four priority areas were identified for guideline and framework development and they included Tiered Know-your-Customer (T-KYC) regulations, Agent Banking regulations, National Financial Literacy Strategy and Consumer Protection.
A major aspect of the strategy is its focus on the end-users of financial services. The end-user, the CBN said, refers to the target adult population in the country, including Micro Small and Medium Enterprises (MSMEs), farmers, artisans and all economically active people particularly those in the informal sector. Financial inclusion is designed to support them to engage in economic activities, manage risks and improve their standard of living, the apex bank explained.
Farmers who spoke to PREMIUM TIMES across selected Ogun communities, however, said that no such initiative has been extended to them. The closest to such initiative was when a group of anonymous individuals approached them and told them to create a group with which their unnamed organisation would support the farmers in their farming activities, said Mr Ezekiel. He added that the nature of the support was unknown, just as the identity of the individuals.
"We have seen numerous people like that in the past and they most often do not show up after so many talks," he explained. "We do not take them seriously anymore."
Poor Pricing; poor market
Nike, a middle-aged farmer, cultivates okra and other seedlings on a small farm in Ona Egbo community in Yewa South Local Government Area. She told PREMIUM TIMES that although she sometimes sells the produce to other traders who resell in big markets, her farm primarily serves as a source of food for her family.
"I really don't sell my produce because they (traders) hardly buy at good prices," Ms Nike said, refusing to give her last name. "It may not be economically profitable to do so except you understand the market very well."
In the revised edition of its policy document released in October 2018, the CBN noted that MSMEs---including farmers---often face a mix of challenges including constrained access to markets and poor skills which impacts the viability of their businesses. "Also, low financial literacy affects their ability to make bankable proposal and access finance on favourable terms," the bank said.
In Papalanto, a community located in Ewekoro Local Government Area along the Lagos-Abeokuta Expressway, farmers who spoke to PREMIUM TIMES complained of poor pricing. They agreed that financial literacy initiatives that would enable them to have a sound understanding of the market can help improve their conditions.
An elderly farmer who cultivates tomatoes, cassava, maize and other produce in Elewu-lekan village attributed poor pricing to the conditions of the farm produce offered for sale.
"Tomatoes, for instance, is perishable," the farmer who identified himself as Baba said. "Only cassava and maize are better and not delicate to handle. Perishable farm products are often priced badly because those who re-sell in Sayedero, Lusada, Ayetoro, Lafenwa and other big markets know we would want to sell to them before they get damaged."
Mr Ezekiel on his part told this newspaper that a particular bag of cassava now sells for N1,500, an amount he said was poor considering the efforts put into planting the produce. "If we have a better knowledge of things and government comes in, we will have better pricing and make more money," he said.
John Ayoola, a development and finance analyst, said financial sector development contributes immensely to poverty reduction. This is felt largely through its impact in accelerating economic growth and direct benefits to the poor, he explained.
The CBN, commenting on same concern, said evidence shows that appropriate financial services can help improve household welfare and spur small enterprise activity. "There is also macroeconomic evidence to demonstrate that economies with deeper financial intermediation tend to grow faster and reduce income inequality," the bank said in its strategy document.
Mr Ayoola opined that financial exclusion, on the other hand, drives poverty.
Financial Exclusion As Driver of Poverty
According to the results of the 2018 Access to Financial Services (A2F) Survey conducted by Enhancing Financial Innovation and Access (EFInA), mobile money usage was predominant amongst already financially included populations while cash transaction continued to hold sway among subsistence farmers and business owners in rural areas.
Across the villages and farm settlements visited by PREMIUM TIMES, most of the farmers interviewed admitted that they never owned bank accounts. All of them said they do not use any account for transactions but rather deal with cash. In Ilaro, two farmers who said that they once owned and operated bank accounts said that the accounts have become dormant due to non-usage. There gave various reasons for not operating bank accounts.
"I am unlettered and will need serious education before I can operate one (bank account)," said Anjuwon Babatunde, an elderly farmer who spoke to our correspondent in Lisa Village, Ifo Local Government Area of the state.
Mr Babatunde, who spoke in Yoruba, argued that bank accounts are best enjoyed when the holder is learned enough to operate it without major assistance from any third party. He made reference to reported cases of credit card fraud and related crimes as a possible cause of fear.
Mr Ezekiel on his part said he has never operated a bank account because of the time of harvest and the volume of transactions he does when it is time to harvest. He said:
"I don't do business every day; our transaction has its peculiar time. I harvest and sell my produce annually. So I don't operate a bank account and I don't do any kind of transfer. I don't know if I need it. I deal with cash."
Baba Funlola on his part argued that there was no basis for opening an account because of the "small" quantity of produce they sell to retailers and the cash involved.
"How much is the money that one would need to take to the bank?" he asked. "I can handle the money, whether it is N50,000 or N80,000. Sometimes the money is not even up to that," he added.
But Bamigbola Aliu, another farmer who spoke to PREMIUM TIMES in Gbokoto Tuntun village, agreed that running a bank account could make their works as farmers easier. Mr Aliu, who admitted that he does not operate an account, said he knows that owning an account is the ideal practise as it also promotes a culture of disciplined spendings.
"I don't have any account but I know it is the best. I don't operate account because I don't have money to open one," he said. He argued that farmers who ignore the benefits of owning accounts do so out of ignorance. He narrated how he once lost a major client because he had no account with which transfers could be made after they agreed on a particular transaction.
"When you handle cash, you would likely spend recklessly and remain poor," said Mr Ayoola. "Account ownership instils in the holder, a certain culture of disciplined spending because you have to consider so many things before making frivolous withdrawals."
Messrs Ezekiel and his friends said they embraced thrift collection in lieu of operating bank accounts.
Thrift Collection as Alternative
The CBN in its Financial Inclusion Newsletter of December 2018 said the NFIS drive has met numerous brick walls over the years. In 2016, data from the CBN showed that 58.4 per cent of Nigeria's 96.4 million adults were financially included comprising 38.3 per cent banked, 10.3 per cent served by other formal institutions and 9.8 per cent served by informal service providers. In 2020, Nigeria plans to have 70 per cent of its adult population in the formal financial services sector and 10 per cent included in the informal sector.
But as more and more Nigerians remain financially excluded from the ecosystem, especially in rural communities, traditional alternatives remain the only option for many.
"We participate in Ajo--local contributions---whenever there is need to address any major financial responsibility," Mr Ezekiel told PREMIUM TIMES. "With that, I bought a land and bought my motorcycle and I still find solutions to financial issues at home. That's all we have."
Baba Funlola, on his part, said he has raised his children and recorded numerous achievements by participating in thrift contribution and other traditional means of raising and keeping money.
When asked if they prefer the traditional thrift system to keeping their money in banks, they said that they would operate with banks if they see more reasons to do so, the benefits it would yield and the financial implications. "For now, since we don't have 'big' money to keep in the bank, we make do with 'Ajo' and other traditional means of keeping and raising funds for projects", Mr Ezekiel said.
The local contribution culture is not however without its flaws.
Mr Aliu told this newspaper that he stopped participating in local contributions and savings when he was disappointed by a thrift collector. "I stopped being a part of thrift contribution four years ago," he began, forcing a bland smile.
"I had contributed my own weekly contributions for several months until it was my turn to be selected as beneficiary. Then tragedy struck: people who had collected stopped making contributions. Some of them were nowhere to be seen. Others came with many excuses. It was pathetic. That experience made me stop. It was a sad experience."
As a solution to rural exclusion, the CBN suggested that there is a need to provide a framework that enables community-based financial institutions to play a more effective role in serving the most unserved and underserved. Institutions such as savings and credit cooperative organisations (SACCOs), farmer societies or non-bank microfinance institutions can play a greater role in reaching the most underserved, both by geography and demographic characteristics. The bank added that a framework shall be developed to enhance greater access to capital and increase their ability to extend more financial services to the excluded groups.
Mr Aliu opined, however, that based on his and other farmers' (sad) experience in the hands of thrift collectors, farmers' groups and other related credit organisations, there would be the need for extant monitoring and regulation to ensure that the mandate of financial inclusion is realised.
A farmer who declined to have his name in print at Ola Adura community of Ogun State buttressed Mr Aliu's point. He added that many farmers and other rural dwellers have had bad experiences with thrift collectors and other related co-operative societies. He said they are discouraged to be part of the financial ecosystem because of government's failure to provide access.
"For example, in this community, we do not have any ATM, not to talk of a bank," he said. "I will have to travel to Papalanto or Ifo if I need to make a withdrawal. Is that an encouragement?"
Mr Aliu added that although many have done good things with funds raised from thrift contribution, he was not so lucky. He stressed that he would be interested in opening accounts if he had enough money and there is access to additional financial services that could be of help to him. "For now, I don't see or know of any," he said, his voice low-pitched.
Access Still A Major Impediment
In its National Financial Inclusion Requirement document released in October 2018, the CBN noted that the requirement for financial products should be simple enough to bring such services within easy reach of all segments of the population. It added that services should be broad enough to enable access, choice and usage and specifically include but not limited to payments, savings, credit, insurance, pension and collective investment products.
Financial products, the CBN added, should be designed to meet the needs of clients "taking into cognisance income levels and nearness to clients to be served through proper and appropriate distribution channels."
But PREMIUM TIMES' checks in some of the villages visited showed that access is still a major factor constituting a setback for inclusion. Outside of their faint understanding of payments and savings products, others like credit, insurance, pension and collective investment products are largely unknown to farmers. For example, many of the communties like Apomu, Ola Adura, some parts of Ibogun, Oja Odan and others do not have an ATM present for peoples' use.
In December, the CBN's Financial Inclusion Steering Committee said it would brace up for 20 per cent financial exclusion because the rate reduced from 41.6 per cent to 36.8 per cent. But PREMIUM TIMES' checks revealed that so much need to be done to ensure that this is realised. Efforts to speak to officials of the CBN were futile at the weekend.
On the way out, Mr Ayoola advised that the government must not rest in its effort to deepen financial inclusion in the country, especially in rural areas. He called for sustained financial literacy schemes and the creation of more and more access points by financial service providers across the value chain.