July 21, 2024

To lure more individuals into the financial system, the Central Bank of Nigeria (CBN) has instructed banks to improve the quality of their products and services.

Olayemi Cardoso, Governor of the Central Bank of Nigeria, announced this at the announcement of the 2023 EFInA Access to Finance (A2F) Survey results in Lagos.

He said: “As an ecosystem, we must redouble our efforts to develop innovative solutions to enable inclusion and be intentional about how we do it.

For instance, the access points effective for included populations might not be suitable for those currently excluded. The products and services that we have developed to get us this far will need refinement to ensure that they are fit for purpose for the next phase of this journey.”

According to him, the Nigerian financial system has evolved with significant improvements in size and depth, particularly in the areas of market development, products, instruments, and payment infrastructure, among other things, reinforcing the need for us as regulators and stakeholders to constantly keep pace with these emerging developments in a sustainable manner.

Cardoso, who was represented by CBN Director, Other Financial Institutions Supervision Department, Chibuike Nwagerue, praised all financial inclusion stakeholders for their efforts and success.

“However, to achieve the target of 95 percent financial inclusion, we must all move from collaboration to concrete commitment. To that effect, I call on all Financial Inclusion implementation agencies to set up specific functions or units dedicated to financial inclusion in their various organizations. This we believe, will provide the necessary ownership and commitment required to achieve our collective goal,” he said.

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Cardoso, who spoke on the theme: Building a More Inclusive and Sustainable Economy: The Role of Financial Inclusion” said financial inclusion is a key developmental objective and a global initiative recognized by several countries worldwide.

“To buttress the importance of Financial Inclusion to National development, over 68 countries have developed and are currently implementing a National Financial Inclusion Strategy. At its core, financial inclusion provides the opportunity for equitable distribution of financial resources to support economic growth. It also contributes to the attainment of the Central Bank’s goals of monetary policy and price stability. An inclusive financial system that allows broad access to a wide range of formal financial services is essential for better transmission of monetary policy and in the attainment of its objectives,” he said. The report, which shows the Northern Nigeria has the least access to financial services.

According to the research, exclusion from financial services is most acute in Northern Nigeria, with 38% in the North East and 47% in the North West compared to 5% in the South West and 10% in the South South.

The A2F survey is Nigeria’s principal source of financial inclusion data, and it is designed to examine adult (18+) Nigerians’ access to and usage of financial services. The survey methodology for 2023 has been modified to reflect shifting population dynamics, and data for 2018 and 2020 have also been updated using the same technique to allow for comparison.

The 2023 statistics show that 26% of Nigerians are financially excluded, down from 32% in 2020, exhibiting strong progress toward the Nigeria Financial Inclusion Strategy (NFIS 3.0) targeted objective of 25% financial exclusion by 2024.

According to the research, use of broader financial services remains limited, highlighting the critical need to focus on the quality and impact of inclusion. While loan use more than doubled to 6%, pension and insurance utilization remained at 8% and 3%, respectively, significantly below the 2024 target levels.

In response to the survey results, EFiNA Chair Dr Agnes Martins stated, “We are seeing encouraging progress toward the NFIS 3.0 recommended goal of reducing exclusion to 25% by 2024, and we must recognize all the good work that has gone into making this happen.” However, we must emphasize that 26% exclusion means that 28.8 million adult Nigerians remain fully excluded from the financial system.

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