The Central Bank of Nigeria (CBN), is embracing the strategic position occupied by the Nigerian Communications Commission (NCC), in the drive to significantly capture every adult in its financial exclusion strategy.
With an estimated population of 190 million, 73.2 million adults have been identified to be financially excluded which represents 41.6 per cent of the adult population, in Nigeria.
According to a 2018 World Bank Report, financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs; transactions, payments, savings, credit and insurance, delivered in a responsible and sustainable way.
The Enhanced Financial Innovation and Access (EFInA), an organisation that promotes financial inclusion and conducts biennial report on Nigeria’s financial inclusion industry, defines financial inclusion as ‘the provision of a broad range of high quality financial products, such as savings, credit, insurance, payments and pensions, which are relevant, appropriate and affordable for the entire adult population, especially the low-income segment.’
In other words, financial inclusion means the sustainable provision of affordable financial services that bring the poor into the formal economy.
As such, being able to have access to a transaction account becomes a first step toward broader financial inclusion since a transaction account allows people to store money, and send and receive payments.
A transaction account serves as a gateway to other financial services.
Indeed, financial access facilitates day-to-day living, and helps families and businesses plan for everything from long-term goals to unexpected emergencies.
As account holders, people are more likely to use other financial services, such as credit and insurance, to start and expand businesses, invest in education or health, manage risks, and weather financial shocks, which can improve the overall quality of their lives.
Great strides have been made toward financial inclusion and 1.2 billion adults worldwide have gotten access to an account since 2011. Today, 69 per cent of adults have an account, according to a World Bank Report.
Nigeria, is however one of the countries identified by the International Telecommunication Union, ITU to have developed policy directions towards deepening financial inclusion in order to address the challenge of access to formal financial services.
Interestingly, in 2012, the Central Bank of Nigeria (CBN) adopted the National Financial Inclusion Strategy (NFIS).
The strategy clearly defined a set of targets for products, channels and enablers of financial inclusion.
The Key Performance Indicators (KPIs) were defined, based on the various dimensions of financial inclusion, including access, usage, affordability, appropriateness, financial literacy, consumer protection and gender.
In line with the 2012 NFIS monitoring plan, a review was carried out from October 2017 to June 2018 based on research reports, data analysis and stakeholder engagements.
The exercise aimed to understand the state of financial inclusion in Nigeria, assess past approaches and lessons learnt in order to prioritise the most critical interventions to achieve the NFIS objectives.
One of the key findings of the Review Committee, show that “Nigeria had made significant progress to implement the NFIS because Stakeholders regard financial inclusion as a national development tool.”
According to information made available, In 2016, 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.
Last year, however, Nigeria had targeted to have 70 per cent of its adult population in the formal financial services sector and 10 per cent included in the informal sector.
National Financial Inclusion Strategy (Revised), October.
