EFInA Convenes Summit on how to Drive Financial Inclusion in Nigeria
In a bid to reduce poverty and achieve inclusive economic growth in Nigeria, Enhancing Financial Innovation & Access (EFInA), a financial sector development organization hosted a workshop with stakeholders such as the Federal Government, United Nations (UN), Heads of Federal Financial Inclusion Initiatives, Academics, Financial Institutions and Financial Services Regulators in Nigeria to advocate for the implementation of policies to drive financial inclusion in Nigeria. The theme of the workshop was ‘’The Role of Government in Driving Financial Inclusion in Nigeria’’.
The Chair of EFInA’s Board, Ms. Modupe Ladipo, shared key barriers responsible for increasing the financially excluded population in Nigeria. She indicated that “generally, income levels in Nigeria are very low. 19.6% of Nigerians mainly get their source of income from non-farming business while 19.1% get theirs from family business (subsistence or commercial farming). Only 4.2% of the adult population get their source of income from the formal sector. In addition, she commented that EFInA observed that the North has a high level of financial exclusion. This is as a result of massive job losses, limited resources and no basic necessities of opening a bank account. Out of 96.4 million adults in Nigeria, 56.3 million (58.4% of the adult population) are now financially served. 40.1 million Nigerian adults (41.6% of the adult population) are financially excluded (without any form of access to financial services). The National Financial Inclusion Strategy target is to lower this figure to 20.0% of the adult population by 2020’’.
She highlighted the issue of inaccurate data in assessing economic growth in Nigeria. ‘‘There are lots of issues in terms of validation and credibility. According to National Identity Management Commission (NIMC), only 6% of Nigerians are duly registered as at 2016. Only 24% of the population has a Bank Verification Number (BVN). We really need to devise how to get a unique form of identification so that we can start to address some of these issues.
She emphasized that the number of microfinance adult users declined from 2.6 million in 2014 to 1.8 million in 2016. There is a general problem around trust as the licenses of some microfinance banks have been revoked. With a lot of bank charges, account owners are left with little money in their bank account.
Similarly, the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development, Her Majesty, Queen Maxima of Netherlands, gave a keynote address on the ‘Transformative Power of Financial Inclusion’. She stated that adopting inclusive strategy is a powerful tool to expanding opportunities for all Nigerians. She highlighted the current progress made in the National Financial Inclusion Strategy, and emphasised to stakeholders the need for high-level political leadership and the participation of the private sector in achieving the targets. Queen Maxima went on to stress that allowing mobile operators to provide mobile money accounts can be a game changer for financial inclusion in Nigeria, and that stakeholders prioritise the development of inclusive retail e-payments system that serves as a basis to distribute other financial services such as savings, payment, credit and insurance services.
She stated that the process of revising Nigeria’s financial strategy indicates huge opportunities to leverage technology. ‘‘Utilizing technology and expanding mobile money is one of the most promising tools to addressing this gap. It allows user to access their accounts remotely through their mobile devices. Currently Nigeria has 58.2 million unique mobile phone users, the contrast to 27 million using mobile banking. This underscores the immense potential which mobile banking shows for advancing financial inclusion.
The Chairman Senate Committee on Banking and Financial Institutions, Senator Rafiu Ibrahim, shared insights on “The Role of Government in Ensuring Financial Institutions Address the Needs of Masses”. Senator Ibrahim highlighted Federal Government initiatives aimed at promoting economic stability and deepening financial inclusion in Nigeria. He stated that the Government would support mobile banking efforts, and lay the framework to permit mobile network operators to deepen its penetration.
The Governor of Central Bank, Mr. Godwin Emiefiele (CON), in his address delivered by Director, Development Financing, CBN, Mr. Mudashiru Olaitan, explained that initiatives like the Bank Verification Number scheme and others have addressed issues connected to identification in the banking system. ‘‘As we progress in our financial inclusion effort, the need to develop the competences of relevant institutions must be pursued. Some of the issues we need to address include low infrastructure in rural areas, low income, low saving culture, high unemployment and cultural & religious barriers. Government has a critical role to play in order to promote inclusive financial execution. Government needs to provide an enabling environment to support the entire value chain within the financial sector to achieve its objectives.