As at 2010, only 36 per cent of adults in Nigeria, roughly 31 million out of the adult population of 85 million, were served by the formal financial sector.
However, latest figures from the Central Bank of Nigeria (CBN) have shown that the population of Nigerians being served by the financial sector has significantly increased over the years.
According to the acting governor of the CBN, Mrs Sarah Alade, the number of financially excluded Nigerians have significantly reduced from 64 per cent to 39.7 per cent.
Alade while addressing a side meeting on Promoting Global Financial Inclusion Summit on Africa at the recently concluded World Economic Forum on Africa (WEFA) held in Abuja, noted that Nigeria is gradually moving towards achieving its aim. She stated that the country was making steady progress towards achieving the 20 per cent exclusion rate targeted for 2020, a progress which she said has been made possible by the implementation of various intervention programmes and initiatives spelt out in the strategy.
Financial inclusion is an imperative factor in reducing poverty and to this end the CBN has rolled out a financial inclusion strategy that aims to ensure that a clear agenda is set for increasing both access to and use of financial services within the defined timeline, 2020. As a country shifting towards becoming a developed nation and the toast of investors across the globe, Nigeria is working towards achieving a fully financial inclusive economy by the year 2020, about six years from now.
It is targeted that at least 70 per cent of the proposed 80 per cent adult Nigerians to be financially included would be in the formal sector with specific targets for services such as payments, savings, credit, insurance and pensions. According to the CBN, financial inclusion is achieved when adults have easy access to a broad range of financial products designed according to their needs and provided at affordable costs.
Consequently, it had come up with various strategies and policies that would engender an all inclusive financial system such as agency ban king, cash-less policy, reduced charges, a more simplified Know Your Customer (KYC) requirements, the recently introduced biometric system, among others. Since the inception of the financial inclusion strategy, there has been more focus on the urban areas and big businesses have been the bride of a majority of the banks. Mostly, a greater number of the unbanked or financially excluded Nigerians reside in the rural areas and the informal sector of the economy.
Financial inclusion efforts rely largely on data-based evidence which is why tracking the progress of the National Financial Inclusion Strategy needs to be data-driven, a major reason the CBN had decided to use geospatial mapping to identify access points to capture unbanked persons to achieve rapid financial inclusion. One of the steps that the CBN took in ensuring that the financially excluded Nigerians are brought on board the financial services ship is the geospatial mapping of financial institutions which was launched in conjunction with the Bill and Melinda Gates Foundation (BMGF).
The interactive mapping tool developed by Brand Fusion Marketing Limited, contracted by the BMGF, provides consumers of financial services in the area with the ability to find financial access points within a 5 kilometer radius of any point on the map. This proximity-based approach reflects geographic distribution of financial access points, creating an ease of access to live information of the services provided by the access points.
The cashless policy has no doubt also contributed to the increase in the number of Nigerians that have so far been drawn into the financial sector. The policy which is expected to be operational in all parts of the country in a few weeks had increased the popularity of mobile banking. Also the ease at which financial transactions are now being done makes the sector more approachable for the excluded Nigerians. With the cashless policy came the use of point of sale (PoS) terminals which makes the purchase of goods and payment for services as simple and easy as ABC.
Aside the cashless policy which has been successful so far, is the introduction of agent banking in the system. Agent banking refers to the delivery of financial services outside conventional bank branches. It entails the use of non-bank retail outlets that rely on technologies such as PoS terminals, mobile phones, amongst others. With agent banking, financial services have been taken to places where commercial banks and even microfinance banks were not able to reach. Many banks have keyed into the policy with some extending their tentacles to rural areas, markets and slums through agents who have taken banking services to places where banks would not have ventured to go to due to the low possibility of profitability.
Also as part of efforts to make financial services not only available but cheaper for Nigerians, the CBN embarked on a gradual phasing out of commission on turnover (COT). From the initial N5 per mille (per N1,000), the CBN had directed that it be reduced to N3 per mille last year and further dropped it to N2 per mille in January this year.
By next year, it will be down to just N1 per mille before it is finally phased out in 2016. This, as well as the ease of opening bank accounts have also contributed to the increase in the number of Nigerians that are now captured by the financial system.
In reducing the cost borne by bank customers, the CBN effected the reduction of the one-off charge for token used for Internet banking to N1,500 from the widely available N3,000 charge. The cost of special request for statement of account was also brought down to N59 per page from N100 per page which is obtainable in most banks.
For the controversial monthly N100 ATM maintenance fee being reintroduced by banks following the cancellation of the per withdrawal charge, the apex banking regulator stipulated that an annual maintenance fee of N100 be charged on every debit card.
If things continue this way, Nigeria will be able to meet the target of capturing 80 per cent of its population in the financial sector, thereby increasing the number of people with access to credit facility. This will in turn lead to increased productivity and reduced poverty, placing Nigeria among the top economies in the world. – Bukola Idowu.
