42% Of Nigeria’s Adult Population Still Financially Excluded, Says EFInA

42% Of Nigeria’s Adult Population Still Financially Excluded, Says EFInA


Post Views: 341 Photo Caption: Chairman Senate Committee on Banking & Financial Institutions, Senator Rafiu Ibrahim; Chair, EFInA’s Board, Ms. Mo...

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Photo Caption: Chairman Senate Committee on Banking & Financial Institutions, Senator Rafiu Ibrahim; Chair, EFInA’s Board, Ms. Modupe Ladipo; Senior Economic Advisor, Open Society Foundations (OSF), Dr. Obiageli Ezekwesili; United Nations Secretary-General’s Special Advocate for Financial Inclusion for Development, Her Majesty Queen Maxima of the Netherlands; Emir of Kano, Lamido Sanusi Lamido; at the EFInA Financial Inclusion Workshop in Abuja.

Latest data by financial sector development organization, Enhancing Financial Innovation & Access (EFInA) shows that 40.1m or 41.6% of Nigeria’s 96.4m adult population do not have access to formal financial services.
This means stakeholders may have to do more in the area of growing the number of those within the financial system above the current 56.3m or 58.4% of the adult population, in line with the National Financial Inclusion Strategy target of “20.0% of the adult population by 2020’’.
Speaking at a stakeholders’ workshop in Abuja with the theme: “The Role of Government in Driving Financial Inclusion in Nigeria,” convened to share its Access to Finance 2016 Survey Data and deliberate on the Role of Government in Driving Financial Inclusion in Nigeria, Chair of EFInA’s Board, Ms. Modupe Ladipo, said the nation’s low income levels remains a major barrier to reducing the financially excluded population.
The workshop was organised to share EFInA’s “Access to Finance 2016 Survey Data,” and to deliberate on the role of government in driving financial inclusion in the country.
According to her, 19.6% of Nigerians mainly get their source of income from non-farming business, while 19.1% get theirs from family business (subsistence or commercial farming, just as only 4.2% of the adult population get their source of income from the formal sector.
EFInA observed that the North has a high level of financial exclusion, due to massive job losses, limited resources and a lack of basic necessities for opening a bank account.
She lamented the issue of inaccurate data in assessing economic growth in Nigeria, particularly issues around “validation and credibility.
“According to National Identity Management Commission (NIMC), only 6% of Nigerians are duly registered as at 2016. Only 24% of the population has a Bank Verification Number (BVN). We really need to devise how to get a unique form of identification so that we can start to address some of these issues.”
She emphasized that the number of microfinance adult users declined from 2.6 million in 2014 to 1.8 million in 2016, pointing to the general problem around trust, especially given that the licenses of some microfinance banks have been revoked.
With a lot of bank charges, account owners are left with little money in their bank account, the statement by EFInA added.
In her keynote speech titled: “Transformative Power of Financial Inclusion,” at the workshop, United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development, Her Majesty, Queen Maxima of Netherlands, identified inclusive strategy as a powerful tool for expanding opportunities among Nigerians.
She highlighted the current progress made in the National Financial Inclusion Strategy, calling for high-level political leadership and private sector participation to achieve the set targets.
For Queen Maxima, allowing mobile operators to provide mobile money accounts can be a game changer for financial inclusion in Nigeria, just as stakeholders must prioritise the development of inclusive retail e-payments system that serves as a basis to distribute other financial services such as savings, payment, credit and insurance services.
Revising Nigeria’s financial strategy, she believes, offers huge opportunities to leverage technology, stressing that “utilizing technology and expanding mobile money is one of the most promising tools to addressing this gap. It allows user to access their accounts remotely through their mobile devices.
“Currently Nigeria has 58.2 million unique mobile phone users, the contrast to 27 million using mobile banking. This underscores the immense potential which mobile banking shows for advancing financial inclusion,” he further added.
Also speaking at the event, Chairman Senate Committee on Banking and Financial Institutions, Senator Rafiu Ibrahim, who shared insights on “the role of government in ensuring financial institutions address the needs of the masses,” highlighted the Federal Government’s initiatives to promote economic stability and deepen financial inclusion in the country.
Government, he continued, would support mobile banking efforts, and lay the framework to permit mobile network operators to deepen its penetration.
For Godwin Emiefiele, Governor of the Central Bank of Nigeria (CBN), who was represented by Mudashiru Olaitan, Director, Development Financing, at the apex bank, initiatives like the Bank Verification Number (BVN) scheme and others have addressed issues connected to identification in the banking system.
‘‘As we progress in our financial inclusion effort, the need to develop the competences of relevant institutions must be pursued. Some of the issues we need to address include low infrastructure in rural areas, low income, low saving culture, high unemployment and cultural & religious barriers,” he added.
Government, he continued, has a critical role in promoting inclusive financial execution, particularly the provision of “an enabling environment to support the entire value chain within the financial sector to achieve its objectives.”
The workshop was attended by representatives of the Federal Government, United Nations (UN), Heads of Federal Financial Inclusion Initiatives, academia, financial institutions and financial services regulators in the country to advocate for the implementation of policies to drive financial inclusion in Nigeria.