How Good News is Reshaped by Financial Constraints: A Case for the Vulnerable

A quick Google search on the poverty rate in Nigeria shows not-so-shocking but alarming figures. As Nigerians, we know that beyond the startling figures lies a deep-rooted reality that transcends data. Poverty is the one thing that we may have not chosen to live with, yet it dwells among us. This is the story of millions of Nigerians, etched in their daily experiences. 

The Nigerian Bureau of Statistics in its Multidimensional Poverty Index survey reveals that 63% of persons living in Nigeria (133 million people) are multidimensionally poor. Now, to get the picture clearly, this index takes into consideration three key dimensions—monetary poverty, education and access to basic infrastructure services. 

For context, more than half of the Nigerian population lacks the financial means to meet the most basic needs. From hunger, malnutrition, lack of proper education and access to other essential services;  consumers cannot afford to pay outright for essential items which power their livelihoods. 

The World Poverty Clocks reports that 71 million Nigerians are extremely poor. In the world's poverty capital, the clock keeps ticking non-stop. And more Nigerians risk slipping into poverty given the country’s rising inflation rate, which currently sits at a record of 22.79 per cent, and the poor state of the Nigerian economy.

These are tough times when good news becomes bad news for many. Good news takes on a complex shade—every silver lining is overshadowed by the heavy price tag it carries, which in this economy can make anyone pensive. For instance, the prospect of a new job can lose its gleam when you start to think of the cost of fuel and transportation. 

As the naira continually falls against the dollar, people find themselves struggling to pay for their education tuition, travel and other dollar expenses. When you think it is hard enough, then comes the struggle to make a dollar payment for your favourite streaming app and online subscription. 

The economy has crippled people’s means of livelihood. The low and middle-class populations are at the edge and finding it extremely hard to hang in balance. It is not too difficult to imagine the state of things as a Nigerian because the people that make up the statistics of poverty exist around us.

With the country’s high cost of living, low and fluctuating earnings and failing economy, the poverty line deepens and so does financial inequality. While the government indisputably has a huge role to play in the areas of fiscal policy and financial infrastructure etc., financial institutions also have a role in the face of this harsh reality. 

When we talk about financial inclusion and equality, it is not an abstract concept. It is empowering those who are vulnerable to income fluctuations and unable to access common credit and insurance. This is not just a market to be serviced, but also a responsibility for Financial institutions.

Needless to say that traditional financial institutions do not serve the poor because of perceived high risks, high costs involved in small transactions, perceived low profitability, and most importantly, the inability to provide the physical collateral generally required by such institutions.

While more poor and low-income households continue to rely on meagre self-finance or informal sources of finance, micro-finance activities prove that poor households do save rather than borrow, and it is possible to successfully mobilize funds from poor households.   

It is important to provide efficient micro-finance services such as savings, credit and insurance facilities to the vulnerable population. This will advertently help people ease burdens, manage risks, build assets, venture into micro-enterprises, fortify their income streams, and improve their quality of life.

Efficient micro-finance services can also contribute to the improvement of resource allocation, development of financial markets and systems, and ultimately economic growth and development. Improved access to institutional micro-finance will enable vulnerable populations to actively participate and benefit from development opportunities.

In our recent creative campaign, we mirrored the reality of those we serve. It is essential to portray how our products interweave with this discourse on financial inclusion, for to ignore the nation's struggles would be to turn a blind eye to the essence of our shared experience.

We understand that in times like this, “the money brands” of Nigeria are expected to do something to make things better for those who are domiciled within their communities. Thus, the need to make known our intentions to support Nigerians through reliable and affordable loans. 

As more people turn to loans, we are working to serve consumers better by making more products that are easy, accessible and meet their diverse needs in this economy. Our product, Aella Credit plays a pivotal role. 

With Aella’s Instant loans, individuals can have access to collateral-free personal loans. However, in our product pipeline, we have the Buy-Now-Pay-Later (BNPL), credit for businesses and the Control Cash for consumers, SME entrepreneurs and employees respectively.  

Consumers can make purchases and pay for them over time with our BNPL offering while the credit for business would give entrepreneurs access to small loans for their low-risk businesses. Meanwhile, Control Cash is an employee loan product exclusively for salary earners by providing them with the financial means to achieve their goals, usually for short-term targets. 

As more financial institutions continue to support people with savings, payments and credit facilities while also integrating with products that consumers use daily, the quality of life of people will significantly improve.