Experts have proffered accelerated digital financial services, integrating financial inclusion into development programmes, and certified mobile money agents, among others as some of the initiatives Nigeria needs to achieve its 95 percent financial inclusion target by 2024.
These initiatives were revealed by experts in the financial industry at the pre- 28th Nigerian Economic Summit (#NES28) event by the Nigerian Economic Summit Group (NESG) and the federal ministry of finance, budget, and national planning.
The event with the theme “Financial Inclusion for all by 2020: What worked, what didn’t, which way forward?” took place last month.
“The most important thing at this point in time is to have a focussed collaboration between the regulators, financial institutions, and the fintechs, towards making sure that we have more financial products available at all locations. We have to do it together so that the target can be achieved,” Ronke Kuye, Chief executive officer, Shared Agents Network Expansion Facilities Limited (SANEF).
Similarly, Isaiah Owolabi, the chief executive officer of Enhancing Financial Innovation & Access (EFInA) noted that we need to think about the consistencies of women in Northern Nigeria and also the young people because they represent the group that is mostly financially excluded in the society.
“We need to consider how we can accelerate digital financial inclusion and also leverage data, which is what we have been doing since 2008 so as to inform key decision policy actions across different sectors,” Owolabi added.
According to the World Bank, financial inclusion is when 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 importance of financial inclusion, which is a key enabler to reducing extreme poverty and boosting shared prosperity, has made it to be identified as an enabler for seven of the 17 Sustainable Development Goals 2030.
Read also: How Open Banking initiative can advance Nigeria’s financial inclusion
This is why the Central Bank of Nigeria (CBN) has been finding ways to reduce the unbanked population by introducing initiatives capable of bringing more people into the financial system.
In 2020, Nigeria’s financial inclusion rate grew to 64.1 percent in 2020 from 63.2 percent in 2018, according to EFInA.
The 2020 figure is below the CBN’s 80 percent financial inclusion target for the year 2020. And although the inclusion rate dropped marginally from 36.8 percent in 2018 to 35.9 percent in 2020, the excluded adult population of 38.1 million reported in 2020 was higher than the 36.6 million recorded in 2018, meaning 1.5 million adults fell into the exclusion circle in the last two years to 2020.
“When we look at the percentages and numbers, in terms of financial inclusion, we are lagging behind payments by 25 percent and credits by 37 percent,” Owolabi said.
He also added that what this translates to is the fact that a lot of people have limited opportunities in terms of being productive or being able to get their full potential.
Kuye highlighted that there are about 1.3 million agents across Nigeria from 561,000 agents as of 2020, with a ratio of 476 agents per 100,000 adult population. She noted that transactions at the agent locations involve products such as cash transfers and bill payments.
“One good thing that came out of the COVID-19 pandemic is that people realised the importance of agency banking. And banks also realised the importance of serving their customers through agency banking,” she said.
Further adding on deepening access to financial services, including mortgage and insurance, Sola Bickersteth, the group chief executive at FIC Exchange Plc, recommended that there is a need to have appropriately trained and certified agents.
“We are advocating that we need to specifically create out of the existing 1.3 million agents, a category of specialists who have a basic certificate, not just training, beyond training, they are certificated by the insurance body, pension body or professionals so that they can start creating a career out of this whole industry that is emerging,” Bickersteth said.
