With less than two years to meet its 80 percent financial inclusion target, the Central Bank of Nigeria (CBN) has approved the setting up of a financial inclusion Trust Fund to help drive its course.
The apex bank disclosed this in its quarterly published financial inclusion newsletter released on its website on March 1 2019.
The Trust Fund “will provide resources for institutions to execute critical cross-agency initiatives that will help achieve the National Financial Inclusion objective,” it said.
As stated in the newsletter, the central bank held its 7th meeting of the National Financial Inclusion Steering Committee on Thursday, December 13, 2018 and was chaired by Godwin Emefiele, the CBN governor.
The Committee provides policy and strategic direction on the implementation of the National Financial Inclusion Strategy (NFIS).
Temitope Akin-Fadeyi, the Secretary to the Committee, in her presentation on the Financial Inclusion Trust Fund, said that in view of the fact that implementation plans of “stakeholders would be self-funded, the elements of the Fund had been streamlined and three cross-cutting initiatives had been proposed.”
According to her, the initiatives include: National Peer Group Educator Programme (NAPGEP), Communication plans, and Financial Inclusion State Steering Committee (FISSCO).
The Committee charged members including regulators, government and other stakeholders, to make their contribution which would be coordinated by the Financial Inclusion Secretariat.
At the meeting, the chairperson, Emefiele, detailed the work that needed to be done by explaining how population growth would be a key concern for meeting the NFIS target. At an annual population growth rate of 2.5 perecnt, he said that “Nigeria’s population by 2020 would stand at about 210 million people and 80 percent of this number must be included.”
According to him, the CBN had commissioned several initiatives to drive financial inclusion, one of which was the introduction of the cashless policy aimed at promoting electronic payments and reducing the use of cash in business transactions.
Meanwhile, the figures by the Enhancing Financial Innovation and Access (EFInA), financial sector development organisation as compiled from its results of the 2018 Access to Financial Services (A2F) Survey, Nigeria’s financial exclusion rate reduced from 41.6 percent in 2016 to 36.8 percent.
The survey further reveals that 55.9 percent women were financially excluded in comparison to 44.1 percent men, with the difference between them representing the Gender Gap.
Similarly, rural areas had a higher financial exclusion rate of 78.5 percent compared with an exclusion rate of 21.5 in urban areas. According to the survey, banked population has continued to rise steadily from 21.1 percent in 2008 to 39.7 percent in 2018. About 95.9 percent of the survey respondents reported not being aware of mobile money services and 89.4 percent were unaware of the presence of banking agents in their communities.
While the Northern part of Nigeria remained the most financially excluded, the South West exceeded the national target with an exclusion rate of 19 percent and the South-South, South East and North Central recording exclusion rates of 23 percent, 29percent and 31 percent, respectively, indicating.
Oluwatomi Eromosele, a research officer at EFInA in her illustration of the 2018 survey during the 7th meeting of the National Financial Inclusion Steering Committee said: “Mobile money usage was predominant amongst already financially included populations while cash transaction continued to hold sway among subsistence farmers and business owners in rural areas.”
According the central bank, one of the key challenges to financial inclusion in the country remains the uneven spread of financial access points particularly in rural areas, “limiting access to appropriate products and services.”
It however said that “the advent of Digital Financial Services as a means of reaching customers at lower cost to the financial services providers has provided a solution to this challenge.”
It is in recognition of this and in a bid to support innovation in deepening the financial services sector that the apex bank released the exposure draft on the Guidelines for Licensing and Regulation of Payment Service Banks (PSBs).
The guidelines stipulated that provisionally, telecommunications companies and other private-sector participants can take advantage of the guidelines to obtain the licenses, reach out to excluded populations and enhance Financial Inclusion in Nigeria.