Nigeria begins review of its Financial Inclusion Strategy
by Onyinye Nwachukwu, Abuja
November 1, 2017 | 8:19 pm| | | Start Conversation
Nigeria is reviewing her National Financial Inclusion strategy to bring more people into the financial system Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele, said on Wednesday.
Emefiele said the review is to enable the country achieve what he called “an ambitious target” of reducing the financial exclusion rate from the present 41 percent to 20 percent.
“The National Financial Inclusion strategy is being reviewed for better effectiveness and impact, with stakeholders mobilized to participate,” Emefiele said as he received Queen Maxima van Amsberg of Netherlands and UN Secretary General’s Special Advocate for inclusive finance for Development in his Abuja office.
The National Financial Inclusion Strategy which was launched on October 23, 2012 targets to reduce the percentage of adult Nigerians that are excluded from financial services from 46.3 percent as at 2010 to 20 percent by 2020.
So far, the country has achieved 41 percent rate, almost five years after the launch of that strategy, but Emefiele said there is still a long way to go in achieving set targets.
“I am concerned about the 20 percent, 2020 target,” the governor stated,” adding “If we must move from 41 percent financial exclusion rate to 20 percent, we will have a lot of work to do. I can assure that we will focus aggressively on it.”
According to him, one area they plan to focus on “is propagating digital financial inclusion- simple, flexible and easy alternative channels to reaching remote areas and rural areas. He said the CBN and other stakeholders are working with the Nigerian Communications Commission (NCC), especially with telecoms subscription rate at over 150 million. “If we work with telecoms, we will achieve a lot.”
He said another new strategy that the CBN and other stakeholders are considering is the adoption of “a bank led approach for our mobile money and not telcos led approach like some other countries have done.”
According to Emefiele, Nigeria has 180 million people with a lot of peculiarities and that the regulators must work out how financial losses could be mitigated before it is adopted. “We may eventually look at a telco led mobile money but we must be able to put in place mitigants on financial loses.”
He told Queen Maxima that Nigeria is “aggressively focusing on the following areas, prioritizing interventions on creating awareness to ensure inclusion, incorporating non-interest financial services and mobilizing banks that offer such banks for better outreach and impact.”
“Already there has been a massive rolling out of agent networks and creating awareness in increased adoption and propagation of digital financial services as simple, flexible and easy alternative channels to reaching remote areas and rural area” Emefiele said.
Also earlier in the day, Chairman, Development Bank of Nigeria (DBN), Shehu Yahaya warned of an imminent employment crisis if strategic intervention is not deployed to quickly address the global domestic population explosion.
Yahaya called on Queen Maxima who equally visited the DBN to use her office to urgently push for increased access to finance for Micro, Small and Medium Enterprises (MSMEs) in order to enhance financial inclusion.
He said MSMEs “are collectively the largest employers in many low-Income countries including Nigeria, yet their viability is being threatened by lack of access to risk management tools such as savings, insurance and credit.”
Their growth, he added, “is often stifled by restricted access to credit, equity and payments services.”
The DBN Chairman, however, noted that “global pursuit of financial inclusion as a vehicle for economic development has had a positive impact in Nigeria to some degree as the exclusion rate reduced from 53% in 2008 to 46.3% in 2010.”
Yahaya also told the Dutch Queen that DBN has commenced lending operations with the provision of over N5 billion to three National Microfinance banks for onward lending to 20,000 MSMEs across every sector of the economy.
He said the DBN believes that access to appropriate levels of financial services in the MSME segment can boost job creation, raise income, reduce vulnerability and increase investment in human capital.
He then appealed to the UN Secretary General’s Special Advocate “to emphasize to relevant authorities the importance of strong corporate governance and no political interference in the operations of DBN as key success factors.
In her response Queen Máxima assured both CBN Governor and the DBN chairman they are “more than prepared, willing and committed to support Nigeria in this process with our knowledge and experiences from abroad.”
She said they “have a commitment to push even private sector members to move in this direction together.”
Queen Maxima commended efforts at revising the National Financial Inclusion Strategy, adding that they had a good discussion with the private sector and with the NCC and many others on it.
Queen Maxima said she was at DBN to understand what the bank is doing and use her office to support and show best practices required to achieve financial inclusion.
Onyinye Nwachukwu, Abuja
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