Financial inclusion is a state where adult Nigerians get easy access to brand range of financial services that meet their needs at affordable costs. As a policy of the Central Bank o Nigeria (CBN), its aim is to empower millions of the unbanked viable economic actors. Despite the inherent prospects of this initiative, it still has challenges which the apex bank believes are surmountable. The continuing search for the best way to strengthen and expand financial inclusion in Nigeria as an agent of accelerated economic development informed the theme of this year’s CBN’s annual seminar for financial journalists.
No doubt, the concept of financial inclusion is now a global thing due to its importance and impact on national economic development.
According to the United Nations Development programme (UNDP), an inclusive financial system entails reaching out to poor and low- income people and providing them with affordable financial services tailored to their needs . It further recognizes market potential / income generating opportunities in lending to the poor but excluded population Mr. Paul Eluhaiwe, director , development finance department CBN, noted that elsewhere the concept has worked and would surely succeed in Nigeria with necessary co- operation by the relevant stakeholders . He enumerated measures taken by such countries as Mexico, Pakistan – Kenya and Philippines in order to make the policy work in their systems.
In the case of Mexico, her government establishment the Development National Plan 2007 -2012 as policy agenda for increasing the level of financial inclusion , strengthening consumer protection and enhancing financial literacy. The country’s national banking and securities commission , also, issued the department rule for the use of non- financial services in underserved region. In the Pakistan , there is a broad – based political commitments to financial inclusion with the state bank of Pakistan at the forefront. In the Philippines, technological and institutional innovations have helped the growth of two pioneering models of mobile phone financial services: the bank –based Smart money (led by mobile network operator, SMART) and the non- bank based G-cash (led by mobile network operator, GLOBE TELECOM). The Central Bank of the country has also been involved in dialogue with the Rural Bankers Association of the Philippines to allow the launch of an innovative application using mobile money .
In nearby Kenya , its Central Bank is empowered to play an active role in expanding access through regulating and supervising commercial banks. In fact , at present , Kenya is recognized as a pioneer in mobile phone financial services through the M-PESA mobile payment system which had 17 million subscribers as at December 2011. Given the foregoing the CBN’s involvement in the implementation of the policy is inevitable.
The 2010 access to financial services in Nigeria conducted by Enhancing Financial Innovation and Access (EfinA) was revealing as it indicated that 39.million adults (46.3 per cent of the adult population) were financially excluded. The survey by the same organization, two years later, showed slight decline in some of the geo- political zones of Nigeria .
Of course , the Nigeria National Financial Inclusion strategy became inevitable in the country and has identified major stakeholders for the implementation of the initiative.
The CBN serves as the secretariat of the financial inclusion while the pilot phase of the implementation of the strategy was launched in February, 2013 in Borno state.
The three-tiers of government, donor partners and licensed and unlicensed institutions are being mobilized to achieve the goals and aspirations of the policy.
According to Mrs Umma Amina , acting director, consumer& Financial Protection department, CBN, reports of this policy has started to yield results. She explained that specific targets across five primary products and services ( payments , credits, savings , pension and Insurance) through a broad range of co-ordinated interactions with high priority have been set up in CBN.
This includes transportation of Know Your Customers (KYC) regulation into a simplified risk-based tiered framework , development and implementation of regulatory Framework or agent.
Other are development and implementation of national financial literacy framework , consumer protection framework and implemnetation of credit enhancement schemes to empower Micro, Small and Medium Enterprises.
Represented by Hajiya khadijah Kasim, deputy director, consumer education division, CBN she explained that since April. 2012 when the consumer protection department was created in CBN , efforts have been made to strengthen their structure in complaints management and dispute resolution. They now focus attention on comprehensive consumer protection framework which specifically defines policies addressing responsible business conduct by financial service providers. Essentially, CBN’s strategy in financial literacy has been to provide leadership in a multi- stakeholder approach to the delivery of financial education.
The objective, according to Kasim, is to improve the knowledge skills and confidence of consumers to understand financial risks and opportunities that will enable Nigerians make informed choices and take effective actions to improve their financial well being.
Strengthening and Expansion of Financial Inclusion
Given the CBN’s action plans to ensure that more Nigerians are captured into the formal financial system, how best can it be expanded and strengthed for quicker result? The panelists on this topic were divided on the CBN’s approach but they all agreed on the need for financial inclusion in Nigeria.
Hajiah Kasim insisted that the apex bank is ever open to suggestions from the financial sector stakeholders to come out with robust framework for effective and efficient achievement of financial inclusion goal as obtained in advanced climes of the world. she noted that with what is already on ground in CBN , once a bank customer has any issue with his service provider within a maximum of two weeks , resolution must surely come. Or else, such a customer has the right to directly approach the apex bank for necessary intervention. Mr. Uzoma Onuoha , deputy director, Development finance department, CBN who was a discussant, believed that financial inclusion can radically change the status of Nigerian.
He listed some friendly initiatives the CBN has already introduced to adequately empower Nigerians in order to tap into financial inclusion policy.
Some of such initiatives are the interest draw back guidelines in NIRSAL loan processing which make it possible for farmers to enjoy some form of rebate and Agriculture credit scheme for small and medium Enterprises (SMEs) which mainly targets women expected to be launched next month .
But prince Emeka Obasi , publisher of HALLMARK NEWPAPER, submitted that the issue of financial inclusion is fiscal policy issue rather than monetary affair which is outside the scope of CBN.
According to him, the CBN was dabbling into financial inclusion policy which basically seeks to alleviate poverty in the society,
Obasi who was one of the discussants expressed worry that such encroachment of finance ministry’s domain by the CBN remains an aberration even as he urged the relevant ministry to wake up from slumber and take leadership role in strengthening financial inclusion .
Among the polices that need to be addressed by the federal government to facilitate the financial inclusion drive, he noted, is the Land Use Act which should be reviewed such that most lands in the rural areas without certificate of Occupancy (C&O) would be bankable. By so doing , most of the rural dwellers and owners of land would easily be carried along in the financial inclusion drive as they would have access to credit to create further wealth, he said.
According to him: “ Once one is lifted above poverty , he does not need to be told to open bank account and use necessary financial products that would make him relevant to the system”
Mr. Onuoha , nonetheless , tasked state governments to use Trust fund models which would enable their indigenes use same as collaterals to access bank loans.
According to him, this would complement CBN’s current moral suasion approach to get banks do certain necessary things needed to fast track financial inclusion in the country“
In all , the discussants agreed that since financial inclusion is a developmental policy , the three tiers of government should be made to play leadership roles beyond mere access to bank products by Nigerians. The Citizenry should be made to be relevant in the scheme of the things by the government investing in skills acquisitions for the youths and unemployed and provision of storage facilities to take care of seasonal farm produce Others are the need for them to be actively involved in research and development as well as education such that majority of Nigerians should be financially empowered to be ultimately included. By so doing, the economy of Nigeria would be better for it.
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