India points way for financial inclusion in Nigeria
Nigeria has a worthy role model in India if it must boost financial inclusion.
Bridging the country’s wide financial exclusion rate lies is dependent on four factors, according to Manoj Sharma, Managing Director of MicroSave, a financial inclusion consulting firm.
“There are four things Nigeria needs to work on to increase financial inclusion rate, first one is digital platform, and this could be working on identity because right now there are quite a number of identities that exist, so only if they create it into one,” Sharma told BusinessDay.
This was disclosed at the just concluded 2018 EFInA financial inclusion conference with the theme; The Business case for Financial Inclusion where the industry expert, Sharma was a key note speaker who delivered a presentation on the topic; Financial Inclusion In India-Key Lessons.
Meanwhile, Sharma said India reported an 80 percent financial inclusion rate as at the end of 2017, this is compared to its 35 percent inclusion rate recorded in 2011.
While Nigeria, Africa’s most populous nation on the other hand has about 41.6 percent financial exclusion rate. Meaning about 40.1 million of the country’s total adult population do not have access to financial services and products.
“The second thing is to create the right payment system platform, the one created in India is a unique identity payment platform, where irrespective of device and whether you have an account or wallet it operates, it is an interoperable platform,” Sharma said.
The third area he suggested was the need to create strong use skills “a reason, a value preposition for the people to adopt financial service. Like the one that was created in India is the social benefit transfer.”
“The fourth and the last thing is to concentrate on the digital infrastructure that is required, so like mobile phones, the network, the transmission lines as well as power. I think those four things, if they are worked on, people will definitely get into the financial inclusion cycle and like EFInA has been saying it will lead to economic growth,” Sharma assured.
Meanwhile, Sharma’s point can almost be linked to the 2018 World Data Lab report which revealed the number of Nigerians living in extreme poverty crossed the 83 million mark in the period under review, surpassing India’s number of extremely poor at 73 million.
This means that almost one out of every two persons living in Africa’s largest economy is now living in extreme poverty than India, and this is despite the latter having more population at 1.35 billion than the former at about 200 million people.
The high financial inclusion rate reported in India aligns with the country’s economic performance, considering it left the spot of extremely poor country to Nigeria, whose financial inclusion rate has been on the decline since 2014.
The World Bank’s Global Findex Database released 19, April 2018 revealed a slump in the level of financial inclusion in Nigeria.
“Financial inclusion is on the rise globally, accelerated by mobile phones and the internet, but gains have been uneven across countries,” the World Bank said in a statement.
According to the report Nigerian adults who have bank accounts reduced by 5 percentage points from 49 percent in 2014 to 44 percent in 2017. While the financial inclusion gap between the banked male and female also widened in the period from 20 percentage points in 2014 to 24 percentage points in 2017.
This is despite the efforts by the country’s apex bank to include about 80 percent of the country’s population by the year 2020. The impediments to achieving the set target are ascribed by CBN to economic constraints, insecurity issues in the northern part of Nigeria, obsolete strategies, among others
Although, in a key note address by Godwin Emefiele, the CBN governor who was represented by Osita Nwanisobi, the Deputy Director, Development Finance department of CBN, at the EFInA conference, he said “the set 20 percent exclusion target is still achievable.”
On how the target will be attained Nwanisobi said “what we want to do to include more Nigerians into the financial sector, especially through the shared agent network facility and the whole essence of that to incentivizes and allow some of these super-agent and mobile money to roll out agent network across 774 local governments in Nigeria and the whole essence is to see how we can bring in more stakeholders into the space.”
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