… More capital empowers banks to invest in tech, boost inclusion
Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), on Tuesday, said financial inclusion for Small and Medium Enterprises (SMEs) is essential to unlock the full potential of the sector and contribute to economic growth.
He said SMEs are responsible for over 80 percent of employment in Nigeria, yet many struggle to access the credit needed for expansion.
“The Nigerian government remains committed to supporting these enterprises,” he said at a two-day 2024 International Financial Inclusion conference with the theme, ‘Inclusive Growth—Harnessing Financial Inclusion for Economic Development’ held in Lagos.
Cardoso underscored the importance of financial inclusion for women and youths, both of whom play a critical role in fostering inclusive growth. Research indicates that when women are financially empowered, they tend to reinvest in their families and communities, generating broader socio-economic benefits. Despite this, women in Nigeria face disproportionate barriers to accessing the formal financial system.
“Women are at the heart of economic development,” Cardoso added. “However, they continue to be excluded from formal financial systems, and this is something we must change.”
The CBN, through various frameworks and initiatives, has been working to close gender gaps and provide regulatory support for digital platforms that offer financial services to women and youth. These efforts aim to ensure that underserved populations have access to the same financial opportunities as other groups, Cardoso explained.
“We are actively empowering young Nigerians to become financially independent,” he said. “With programs designed to improve financial literacy, we are helping them pursue entrepreneurship and contribute to the country’s economic growth.”
A key focus of the CBN’s strategy is the promotion of MSMEs, which are widely recognised as the backbone of Nigeria’s economy. “Access to financial services is critical to the success of MSMEs,” Cardoso said. “When businesses can access credit, they create jobs, boost productivity, and improve livelihoods. This is the engine that drives economic development.”
He also stressed that widespread access to financial services not only helps businesses but also improves the quality of life for ordinary Nigerians. As more individuals are able to save, invest in education, healthcare, and housing, their well-being improves, which in turn fosters broader economic development. “Financial inclusion is not just about money; it’s about opening up new possibilities for people,” he remarked.
Since the launch of the National Financial Inclusion Strategy (NFIS) in 2012, the CBN has made significant strides in reducing financial exclusion. The goal of the NFIS is to ensure that all Nigerians have access to affordable financial services, including basic savings accounts, micro pensions, and microinsurance, as well as access to digital payment platforms. According to Cardoso, these efforts are vital for achieving macroeconomic stability and driving national progress.
“The vision of the CBN is clear,” he stated. “We want every Nigerian to have access to financial services, regardless of their location or background.”
One of the most transformative elements of the financial inclusion agenda, according to Cardoso, has been the rise of digital payment channels and mobile technology. With Nigeria’s mobile phone penetration rapidly increasing, there is now an unprecedented opportunity to provide financial services to even the most remote parts of the country. Interoperable payment platforms have allowed millions of Nigerians to send payments, save money, and access credit without the need for traditional bank accounts.
“Technology has revolutionised financial inclusion,” Cardoso said. “It has democratised access to financial services and opened up opportunities for millions of Nigerians who were previously excluded from the formal financial system.”
He also highlighted the government’s commitment to fostering an enabling environment for innovation. Through policies that encourage competition, innovation, and financial stability, the government aims to support the continued growth of digital financial platforms and expand access to financial services across the country.
Philip Ikeazor, CBN’s deputy governor for financial system stability, also spoke at the conference, reflecting on the progress made since the introduction of the National Financial Inclusion Strategy. Ikeazor noted that financial exclusion rates had decreased significantly, from 46.3 percent in 2010 to 26 percent in 2023. Despite these gains, there remain significant challenges in ensuring that vulnerable groups, such as women, youth, rural communities, and MSMEs, have full access to financial products and services.
“While we’ve made great strides, there are still over 28 million Nigerians who lack access to formal financial services,” Ikeazor said. “Our work is far from finished, and we must continue to target the most excluded groups if we are to achieve true financial inclusion.”
Cardoso’s remarks underscored the need for continued efforts to ensure that financial services are accessible to everyone, especially those in underserved areas. By enhancing financial inclusion, he concluded, Nigeria can unlock new economic opportunities, create jobs, and improve the livelihoods of millions of its citizens.
“As we continue to build on the progress we’ve made, it’s clear that financial inclusion is a critical driver of economic development,” he said. “It’s not just about improving access to finance; it’s about changing lives and building a stronger, more inclusive economy.”
In line with its efforts to deepen financial inclusion, Cardoso said the CBN recently introduced new minimum capital requirements for banks. This strategic move ensures that banks are well-capitalised, enabling them to take on greater risks, particularly in underserved markets. With stronger capital bases, banks can provide more loans and financial products to MSMEs, rural communities, and other vulnerable segments that have previously struggled to access formal financial services
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