The Nigerian government launched a National Financial Inclusion Strategy (NFIS) in 2012 to reduce the percentage of financially excluded citizens to 20 percent by 2020. Following the launch of the Strategy, the rate of financial inclusion inched forward, albeit slowly, before plummeting in 2015, only to pick up again in subsequent years.
According to the Central Bank of Nigeria (CBN), exclusion has decreased by 10.2 percent as of 2019. Furthermore, Joseph Attah, Head of Financial Inclusion Strategy, CBN assured the nation that the ambitious goal of achieving a 20 percent decrease was still achievable. However, due to the Covid-19 Pandemic, pre-planned financial inclusion initiatives had to be halted, as did the possibility of achieving the desired reduction.
Also the pandemic and resulting global lockdown greatly affected CBN’s other inclusion targets of 80 percent by 2020 and 95 percent by 2024. As a result of the pandemic’s disruption, Ashley Immanuel, CEO, Enhancing Financial Innovation and Access (EFInA), stated that the goal set for 2020 (80 percent inclusion) would most likely be met by 2030. In addition to this, the Central Bank’s official figures on inclusion in 2019 revealed that, without intervention, meeting the 2024 target is not entirely feasible.
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Given the economic benefits that financial inclusion brings to the nation and its citizenry, analysts say the journey to making Nigeria an inclusive country mustn’t rely solely on government-led initiatives. If Nigeria is to meet the Central Bank’s target of 95 percent financial inclusion by 2024, the government will require assistance, industry players said.
Some institutions have recognized this and have begun to work aggressively to improve Nigeria’s financial inclusion. Banks and other financial institutions, predictably, are at the forefront of these nation-building initiatives.
Nigerian banking institutions have leveraged technology and service design to bank the unbanked in recent years. However, with only 29 percent of adults having accounts, 3 percent having mobile money accounts, and 3 percent having non-bank financial accounts, the gap remains enormous.
Perhaps this is why some institutions have expanded their financial inclusion initiatives. These financial institutions have begun to offer customers the opportunity to win millions of naira for either opening a new account and maintaining a certain account balance or maintaining a required account balance in an existing account.
Initiatives like these help to reduce the alarming rate of dormant accounts, which undermines the goal of meeting set targets. Existing accounts were dormant in 48.9 million (32 percent) of cases as of April 2020. This negates the purpose of financial inclusion initiatives.
To address this anomaly, some financial institutions have implemented reward systems that reward customers for every interaction they have with their platform. All of these initiatives are things that the government, as represented by the Central Bank, cannot undertake because it does not have direct financial interactions with customers.
Adding to the urgency for increased financial inclusion is the effect it has on the economic empowerment of citizens. Financially vulnerable people can improve their lives through financial inclusion. Financial inclusion enables these people to save and invest, thereby improving their living conditions. As a result, it is a critical tool in the fight against poverty.
Given that financial inclusion also helps in combating income inequality, Fidelity Bank, one of Nigeria’s outstanding financial institutions at the forefront of the financial inclusion drive, has organised its Get Alert in Millions (GAIM) Savings Campaign for three consecutive seasons, with the fourth currently ongoing.
The Campaign has set out to enrich the lives of several Nigerians through a savings promo that requires new and existing customers to save and maintain a specified balance. Beyond enriching the lives of these Nigerians through the benefits that come from saving, the scheme has also empowered them with much-needed cash prizes and gadgets.
Fidelity Bank and other visionary institutions have taken on the responsibility of improving Nigerians’ and the nation’s economic conditions. More institutions must join the already existing ecosystem actors who are accelerating the rate of financial inclusion and reducing economic strains if Nigeria is to meet and exceed all set financial inclusion targets.
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