The Central Bank of Nigeria (CBN) Thursday unveiled the National Financial Inclusion Strategy designed to ensure that at least 80 per cent of Nigerians have access to banking and other financial services.
The Governor of CBN, Mr. Godwin Emefiele, represented by the Deputy Governor in charge of Financial System Stability, Mrs. Aisha Ahmad, made the presentation at the National Financial Literacy Stakeholders’ Conference in Abuja.
Emefiele said about 36.8 per cent of eligible Nigerian adults currently do not have access to financial services, adding that the figure indicated a significant improvement over the 41.6 per cent exclusion rate recorded in 2016. He noted that although the improvement was encouraging, “there is still considerable work to be done to achieve the overall 20 per cent target exclusion rate by 2020.”
Emefiele said the apex bank had also released new policy frameworks on consumer protection, financial literacy and financial education. He said, “Adequate consumer protection is critical to sustaining the long term viability of the financial sector because consumer protection is a necessary precursor to building and maintaining trust in the formal financial sector.
“An essential pillar of any consumer protection regime is consumer education, which is founded on financial literacy. “The benefits of a financially literate population are immense. Consumers are better equipped to make optimal choices in the use of financial products, pose lower credit and default risk.
“In addition, it constitutes a market for sustainable financial services and promote Financial System Stability by increasing market demand and responsible use of financial services.” Emefiele said the apex bank recently introduced regulations and guidelines for the licensing and operations of Payment Service Banks in furtherance of its efforts to leverage technology to enhance access to financial services for the unbanked.
According to him, the move was expected to drive down exclusion rates by leveraging wider variety of multiple channels to enhance access to deposit products, payments and remittance services to small businesses and low income households. The governor, however, stressed that consumer protection and its constituent pillar of consumer education remained critical to the attainment of its objectives for inclusion.
The CBN boss said building inclusive financial systems had become an important objective for policymakers around the world given the positive effects it has on poverty reduction and enhancing economic prosperity.
He said the conference, themed: ‘Implementing Financial Literacy and Consumer Protection to Advance Financial Inclusion in Nigeria,’ could not be more unambiguous in its focus and urgency to move from the conceptual to practical in the drive for financial inclusion.
Emefiele said low financial awareness and literacy levels as well as consumer confidence remained critical issues which must be examined more closely if financial inclusion strategy must succeed.
He stressed that the financial system remained probably the most affected by technological advancement with new digital products and services which had emerged and the internet greatly influences consumers’ purchasing decisions as they continue to adopt e-commerce.
The CBN governor further noted that 1.4 billion electronic transactions valued at N97.4 trillion were processed in the banking industry in 2017, compared to 869 million transactions valued at N69.1 trillion recorded in 2016. “While these developments are no doubt good for the financial system and are expected to aid our financial inclusion efforts, they are accompanied by a myriad of challenges,” he explained.
Among other things, he said privacy and security concerns, requiring enhanced privacy and data protection for consumers continued to pose a challenge to achieving financial inclusion. He also said consumers are exposed to new and more inventive fraudulent practices which required stakeholders to double their combat efforts.
“The industry is also faced with an increasing complexity of financial products and services accompanied by consumers’ lack of information or capacity to understand such products and/ or their associated risks. Thus enhanced disclosure has therefore become very essential,” he said.
He added that as the markets develop with the introduction of new innovative players, products, and channels, the challenge for regulatory agencies will be to continually balance supervisory objectives aimed at identifying, managing and mitigating risk with those that support market development and help promote financial inclusion.
He, however, expressed hope that there will not only be renewed vigour but more alliances, partnerships and collaborative programmes at the end of the conference towards achieving its objectives.
“I sincerely believe that through our collaborative efforts, we will not only surpass our target of 80 per cent financial inclusion target by the year 2020, but also have financially capable and more confident consumers that would support the stability of our financial system and contribute to the economic growth of our great country,” he said.