Stakeholders in the financial industry have said developing products and services that fit the needs of consumers, digital literacy, trust, etc are some of the innovative ways to move 38 million unbanked Nigerians into the digital economy.
This was revealed at the maiden edition of Nigeria’s International Financial Inclusion Conference, a Central Bank of Nigeria (CBN) initiative, held last month.
The event themed “Financial Inclusion for all: Scaling Innovative Digital Models”, presented a unique opportunity to showcase Nigeria’s financial inclusion journey, particularly the innovative use cases that continue to emerge within the dynamic payments and financial system in the country.
“Before we can even think about digital, we need to think about digital literacy because people need to know before they can utilize the products,” Isaiah Owolabi, chief executive officer at Enhancing Financial Innovation & Access (EFInA) said.
He said when we think about digital literacy, we also need to think about how to integrate it across different program areas to make sure that digital literacy and financial inclusion programs are strongly interlinked.
“Most importantly, they should be connected to market opportunities because that is what will increase the uptake in these digital tools,” Owolabi added.
He also said there should be ways to tackle cybersecurity issues to increase trust in digital financial products. “If people are not well protected, the loss can significantly affect their interest and continued use of financial products.”
Musa Jimoh, CBN’s director for Payment System Management, said the conversation should be about creating products and services that fits the needs of consumers.
“What kind of creative products do we need to bring into the financial and banking system so that the products will fit those people that are excluded from the financial net. And that is where the regulator comes in, by providing a regulatory environment that will enable and stimulate innovation,” he said.
Jimoh said various technology innovations like the Unstructured Supplementary Service Data (USSD) and offline connections are important because there are not strong digital signals in some places in the country
“How do we provide services to those who are not digitally connected, so off line is key.”
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 important role played by financial inclusion in reducing extreme poverty and boosting shared prosperity, has led to its inclusion among the enablers for seven of the 17 Sustainable Development Goals 2030.
Read also: How MfBs can tap big data to drive financial inclusion
This informs Nigeria’s apex bank’s desire to reduce the unbanked population through new 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. But the 2020 figure is below the country’s 80 percent financial inclusion target for the year.
The Federal Government has now set another target of 95 percent financial inclusion rate by 2024. It aims to achieve this target through policy initiatives such as Revised National Financial Inclusion Strategy, National Strategy for Leveraging Agent Networks for Women’s Financial Inclusion, National Fintech Strategy, Nigeria Financial Services Maps, and Payment System Vision 2025.
“The next step for us is to deepen our collaboration to ensure that creative digital solutions are scaled for success. It is only as good as how it impacts people,” said Aishah Ahmad, deputy governor of the CBN.
She said they will continue to encourage innovators to also include financial inclusion as one of their goals. “We know that when everyone is included the ecosystem is better for it, the companies are better for it, the country and more importantly the citizens as well.”
