Financial literacy critical to inclusive growth in Nigeria – experts

Experts in the financial sector have said financial literacy serves as a major strategic tool that financial institutions can leverage to drive inclusive prosperity in Nigeria.

The experts made the submission at a workshop by the Nigerian Economic Summit Group in collaboration with the Zedcrest Group, held Tuesday, in Lagos.

The event themed ‘Securing and enriching Nigerians at scale: Prosperity inclusion through financial sector innovation’ aimed to re-evaluate and reconsider the role of the financial market in building a secure future for inclusive prosperity in Nigeria.

“Financial organisations like the banks need to have an incubator mindset by participating in financial literacy and partnering more with religious leaders to educate people on the benefits of financial literacy and having a smartphone,” Oseikhueme Anao, chief financial officer at Standard Chartered Capital and Advisory, said.

Anao also noted that although agency banking is a good initiative by the banks, in order to bring more people into the financial net, they need to have an investment strategy by going to the streets to teach people how to use bank accounts.

“From there, you can give them credit and help them grow through the sector. We need to stop focusing only on big corporations but more on the small ones.”

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Financial literacy refers to the ability to make informed judgments and take effective decisions regarding the use and management of money. And thus, it goes hand in hand with financial inclusion in terms of strengthening more financial depth.

“One of the key areas for inclusive propensity is education. I don’t mean going to school alone but being educated. If people are not educated, having inclusive growth will be very difficult,” Zeal Akaruiwe, the executive officer at Graeme Blaque Group said.

According to data from Enhancing Financial Innovation and Access (EFInA), Nigeria’s financial inclusion rate grew to 64.1 percent in 2020 from 63.2 percent in 2018. The 2020 figure is below the Central Bank of Nigeria (CBN)’s 80 percent financial inclusion target for the year 2020.

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.

Dayo Obisan, the executive commissioner (operations) at Securities and Exchange Commission (SEC), said a lot must be done requiring information dissemination and educating the public.

“People may have the money but there is a wide gap in terms of how to use it which explains why they spend their time chasing illegalities such as Ponzi schemes,” Obisan said.