Post Views: 190 The Central Bank of Nigeria (CBN), on Wednesday published a revised 2018 version of its National Financial Inclusion Strategy Document...
The Central Bank of Nigeria (CBN), on Wednesday published a revised 2018 version of its National Financial Inclusion Strategy Document (NFIS) with a new target of 70% adults included in formal financial services and another 10% in the informal sector by 2020.
This represents an increase from 58.4% of Nigeria’s 96.4m adults who were financially included in the 2016 edition, which comprised 38.3% banked, 10.3% served by other formal institutions and 9.8% served by informal service providers.
The revised documents set a new target of 476 agent banks per 100,000 adult Nigerians by 2020, up from 62 in the 2016 strategy document.
This, according to the CBN, will result in about 500,000 agents available to serve about 105m adult population in the country, “considering the shift from physical bank branches to branchless banking globally.”
“Justification for this new figure is based on recent developments in the financial sector aimed at taking financial services to the unserved and under-served, using branchless platforms such as Agent banking and digital platforms,” the CBN explained.
According to the document posted on the CBN’s website, “the revised strategy recognises the imperative for prioritizing the foundational constraints, the importance of innovation and the need to create an enabling environment to promote financial inclusion.”
Notwithstanding current implementation challenges, the CBN noted emerging opportunities enhancing prospects of remarkably increasing financial inclusion by 2020, such as last year’s signing of a Memorandum of Understanding between the CBN and the Nigerian Communications Commission (NCC) on digital payment systems. There were also collaborative efforts between the CBN and Nigeria Inter-Bank Settlement System (NIBSS) to create a regulatory sandbox for innovative financial services; as well as the partnership between the Committee of Bank Chief Executives and the private sector to roll out a 500,000-agent network nationwide.
The document listed key findings from the review to include Nigeria’s significant progress in the implementation of the NFIS because stakeholders regard financial inclusion as a National development tool.
It also noted the “inter-departmental and inter-agency governance arrangements including Steering and Technical Committees, Implementation structures in the 36 States and the Federal Capital Territory (FCT) and National Working Groups, have been collaborating to achieve set targets.”
Stakeholder engagements, it said, revealed the fact that “some of the elements of the strategy such as point-of-sale terminals are no longer the appropriate or most efficient channel for distribution of financial services in view of advances in technology; regulations and policies such as fixed fees for certain transactions, limit the range and variation of business models that can be deployed.”
Other revelations from the engagements included innovative models that have substantially increased financial inclusion in other countries such as mobile money penetration are yet to take significant root owing to some restrictive policies and regulations.”
There is also the low pace of adoption and agent density due to lack of understanding of the workings of agent banking and the opportunities it provides for stakeholders; as well as the challenging macroeconomic and security situation in the review period exacerbated the constraints to financial inclusion.
It also highlighted the “low or non-adoption of financial products owing to cultural and religious factors slowed down financial inclusion in the Northern parts of the country.”