President Muhammadu Buhari yesterday commended the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, and other stakeholders for their contributions towards promoting and deepening financial inclusion in the country.
The CBN governor chairs the National Financial Inclusion Steering Committee, which had worked tremendously to achieve 65 per cent financial inclusion rate over the past few years and target 95 per cent by 2024.
Speaking at the opening of the 2022 International Financial Inclusion Conference with the theme: “Financial Inclusion for All: Scaling Innovative Digital Models,” in Abuja, the president said his administration remained committed to providing continuous support to all financial inclusion stakeholder institutions in the public and private sectors.
Buhari further unveiled five important financial inclusion artefacts which were to provide direction for financial inclusion in Nigeria in the coming years.
He said the federal government believed that achieving financial inclusion goals would further boost the country’s economic fortunes.
Represented by the Minister of the Federal Capital Territory (FCT), Muhammad Bello, Buhari, further charged all implementing agencies in Nigeria to take advantage of the rare gatherings to better deliver on their mandate for inclusive growth and development.
Buhari noted that Digital Financial Services (DFS) remained one key component of the digital economy strategy which holds the potential to improve the country’s GDP and provide access to finance to underserved areas.
He said, “I am glad that financial services stakeholders have leveraged DFS to provide financial services to our people. The benefit of this was obvious during the lockdown occasioned by the COVID-19 pandemic when our citizens were able to conduct transactions via DFS, thus, limiting the risk of the spread of the virus and providing access to financial services during this period.”
The president admitted that the digital innovation, spearheaded by the central bank had also facilitated access to credit and payment for rural dwellers and enabled them to conduct their businesses without the need to travel far in search of the nearest bank branch.
He said financial inclusion stakeholders had been at the forefront of providing innovative solutions for addressing some of the pressing issues which Nigerians face as a people.
Buhari said, “For instance, to increase financial services access points in underserved locations in the country, the Central Bank of Nigeria issued the Payment Service Bank regulatory framework.
“Furthermore, through the Shared Agent Network Expansion Facility (SANEF), the number of agent banking locations in the country is now over 1.4 million from 86,000 in 2018.
“The Open Banking framework and Regulatory Sandbox initiatives are some of the other initiatives that are meant to improve financial inclusion in Nigeria.”
He further noted that the theme of the conference was timely, as it looks to leverage innovative models to drive financial inclusion, adding that it also aligns with the broad objective of the government to leverage the digital economy for sustainable growth and development.
Buhari further tasked the stakeholders to take adopt bold measures to enable the country to meet its targets following the launch of the eNaira in October last year, adding that “This launch did not just put us on the global map, but also provided us with the currency for the digital economy”.
Emefiele, earlier noted that the Financial Inclusion Steering Committee was the apex body responsible for implementing the Nigerian Financial Inclusion Strategy and ensuring the alignment of financial inclusion policy objectives to the inclusive development objective of the federal government.
He pointed out that the global meltdown in 2008 made financial services regulators focus on improving the financial system’s stability and mitigating risks that could lead to a future recurrence.
According to him, Nigeria implemented a tighter prudential regime to respond to the meltdown, adding that while these efforts improved financial system stability, it inadvertently undermined access to finance as entry barriers to the financial system became a disincentive for many economically active Nigerians.
Emefiele, however, noted that the response to the global event in 2008 was not entirely responsible for the low access to finance for the underserved in Nigeria.
Rather, he identified infrastructural deficits including low broadband penetration, lack of a functional national identity system, and high cost of delivering financial services through bank branches to the underserved as contributors to Nigeria’s financial exclusion situation.
He said as at 2008, 52.2 per cent of Nigerian adults were financially excluded which implied that one out of every two adults had no access to financial services.
He said even though Nigeria had a sizeable number of banked populations, “our financial inclusion rate was one of the lowest in the sub-region. More worrisome was the fact that many adults were financially excluded.
“Youth, aged 18-35 years, and MSMEs (which employed over 60 per cent of Nigerians), were disproportionately excluded from access to financial products and services.”
As a result, the CBN governor said stakeholders undertook the onerous task of driving access to finance for the benefit of the hitherto excluded segments through the National Financial Inclusion Strategy.
He stated that as at end-2020 the financial exclusion rate had reduced to 35.9 percent.
“While this remains high when considered as absolute numbers, it is a huge improvement when compared to the position as at 2008. This change did not happen by accident but resulted from the decisive and concerted approach by National Financial Inclusion stakeholders to address key pain points and bottlenecks that were deterring financial inclusion,” he said.
Emefiele maintained that financial inclusion remained key to economic development and inclusive growth, stressing that there is a positive correlation between the financial inclusion rate of a country and its GDP growth.
He said while stakeholders in Nigeria were exploring ways to address the high financial exclusion rate, the Alliance for Financial Inclusion (AFI) outlined the Maya Accord in 2010.
According to him, the Accord is a global initiative for responsible and sustainable financial inclusion that aims to reduce poverty and ensure financial stability for the benefit of all.
He said as part of its commitment to that Accord, Nigeria developed its first financial inclusion strategy in 2012, where it set a goal of achieving a financial inclusion rate of 80 per cent by 2020.
The CBN governor said the 2012 strategy provided a platform to facilitate a concerted approach by stakeholders to address financial exclusion in Nigeria.
He noted that while the 2012 strategy was fundamental in many respects, it was prescriptive and looked to scale traditional financial services models to address financial inclusion, which made it slow and expensive to meet our growth aspirations.
However, United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development, Her Majesty Queen Maxima of the Netherlands, in a special keynote address delivered virtually, said digital connectivity remained a good way to begin to bridge gender gaps in the country.
She said financial inclusion could bring positive changes to millions of Nigerians especially women adding that no way should be left behind in current inclusion strategy.