As part of efforts towards building a more inclusive financial system that will support the growth of the economy, the Central Bank of Nigeria (CBN) and the Bankers committee on Friday highlighted building blocks that are needed to harness the gains of digital finance tools.
Such measures include unique identification number; financial access points, and robust payment infrastructure.
These measures the CBN said are needed in order to increase the confidence of underserved Nigerians in conducting digital financial transactions.
Godwin Emefiele, governor of the CBN gave the highlight during the opening ceremony of the bankers retreat in Ogun State.
“In furtherance of these efforts, this Bankers’ Committee Retreat is rightfully focused on strategies to address current constraints that inhibit the use of digital finance tools,” Emefiele said.
Notwithstanding the gains that are available to Nigerians from improved access to finance, close to 36 percent of eligible Nigerians do not have access to formal financial services. These individuals often access finance and credit at an exorbitant price. It also acts as a huge deterrence to the growth of their businesses. In addition, the high cost of maintaining bank branches in rural communities, which are less dense in population relative to urban communities, also limits the supply of banking services in many rural communities.
Given the country’s large population size of almost 200 million, a report by McKinsey and Company notes that improved access to finance and credit could bolster Nigeria’s GDP by about 10–12 percent by 2025.
Emefiele noted that with increased usage of mobile phones by over 87 percent of Nigerians and its abilityto support financial transactions through USSD and mobile app channels, the Central Bank has implemented policy measures that will enable underserved Nigerians access finance and credit via mobile devices.
Such policy measures or initiatives include issuance of the regulatory framework for agent banking and agent banking relationship in Nigeria; Introduction of the Super Agent License; mobile money; Shared Agent Network Expansion Facility (SANEF); and Issuance of the Regulatory Framework for the use of Unstructured Supplementary Service Data (USSD) in the Nigerian Financial System.
Others are Creation of Payments System Management Department (PSMD); and Payment Service Bank (PSB) licenses.
“This year’s Retreat titled “Delivering Inclusive Growth: Leveraging Digital Finance” comes at critical time in our nation’s history, when efforts are being made by the monetary and fiscal authorities to structurally rebalance and diversify the Nigerian economy,” said Emefiele.
This he said can be achieved by leveraging digital finance tools in supporting growth across key sectors of our economy including agriculture, manufacturing and the creative industries.
This year’s bankers committee retreat retreat is the 11th in a series of strategic reviews of critical developments in the Nigerian financial system, in particular and the macroeconomy, in general.