CBN Outlines Policy Initiatives to Accelerate 95% Financial Inclusion Target

•Agent banking channels hit 1.4 million in October

Obinna Chima

The Central Bank of Nigeria (CBN) has disclosed that it is assiduously working towards achieving its 95 per cent financial inclusion target by 2024, with the recent launch of its Revised National Financial Inclusion Strategy (NFIS 3.0) and a number of other important policy frameworks.

It listed the other initiatives to help ensure 95 per cent of Nigerians have access to financial services to include the National Strategy for Leveraging Agent Networks for Women’s Financial Inclusion; National Fintech Strategy; Nigeria Payments System Vision 2025 (PSV 2025); Nigerian Financial Services Maps (NFSMaps); the CBN Regulatory Sandbox as well as the Central Bank of Nigeria – Central Bank of Egypt Fintech Bridge.

The CBN Deputy Governor, Financial System Stability Directorate, Mrs. Aishah Ahmad, disclosed this in a speech she delivered at the recently held 2022 Financial Inclusion Conference, in Abuja, a copy of which was made available to THISDAY yesterday.

According to Ahmad, “notwithstanding these successes, some of which were spurred by the COVID-19 pandemic, certain segments such as youth, rural dwellers, women, north-east and north-west regions and MSMEs/Farmers remain relatively excluded [11%, 24%, 8%, 32% (NW) and three per cent (access to formal loans) respectively] compared to the national averages. Progress in credit, insurance and pensions have also been slow. These segments are the key target priority areas for the NFIS 3.0.

“Agent banking network growth was significant, increasing from 38,416 agents in December 2018 to 1.4 million by October 2022, primarily driven by the Shared Agent Network Expansion Facility (SANEF) initiative of the CBN and the Bankers Committee.

“This expansion of agent network is an important lever to expand the number of financial access points per 100,000 of the population – thereby boosting access to affordable financial services by those in the more dispersed rural areas and certain urban centers. The growth in agent networks which has been significant also in the North-East (67% in 2020) will be important for improving financial inclusion in the north.

“Whilst the 2022 A2F survey is being awaited, it is anticipated that the financial inclusion rate would have improved by another 5 percentage points, drawing on the momentum on Digital Financial Services spurred by COVID-19 pandemic, and leveraging the myriad of financial services solutions in the dynamic financial system.”

Furthermore, she listed future priorities for accelerating financial inclusion for the CBN to include consolidating interagency and policy – innovation collaboration; deepening digital financial services penetration in excluded segments through the e-Naira offline solution; enhancing and harmonising digital identity for financial inclusion; and leveraging NIN foundational ID for further financial inclusion.

Others are implementing full cashless policy nationwide; implementation of the Nigerian Domestic Card project; gender mainstreaming in financial services; expending agent network penetration in underserved areas and further development of a robust payment system infrastructure.

Ahmad pointed out that financial inclusion remains an important policy goal for countries and central banks, given its role as a key driver of poverty alleviation and economic growth.

She noted that when individuals have access to financial services that are varied, affordable and meets their specific needs and circumstances, it enhances their economic opportunities, financial resilience and wealth prospects thereby boosting national productivity and inclusive growth and development.

“Global alliances for financial inclusion such as the Financial Inclusion Global Initiative (FIGI) championed by the World Bank Group (WBG), and notable partners including the Bill & Melinda Gates Foundation; and the Alliance for Financial Inclusion (AFI)’s network of policymakers, serve to promote policies to ensure that over 1.4 billion people around the world without access to financial services are formally included in the financial system.

“Financial inclusion is a strategic objective for the CBN given its mandate to promote price, monetary and financial stability. The role of financial inclusion in important in enhancing its financial stability and monetary policy effectiveness.

“Policy making by the CBN in collaboration with other financial sector regulators has been an undeniable force behind Nigeria’s advancements in financial inclusion over the last decade. Nigeria’s financial inclusion journey began in 2010 when the CBN along with 10 other countries joined the Maya Accord under AFI, a global peer country partnership for financial inclusion – pledging individual commitments to financial inclusion in their countries.

“This sparked the birth of the National Financial Inclusion Strategy (NFIS) in 2012, and the establishment of governance and policy frameworks through which the strategy is being executed.

“The convening power of the CBN shaped the financial inclusion narrative for Nigeria, given its role as chair of the National Financial Inclusion Steering Committee (NFISC) and Technical Committee (NFITC) chaired by the CBN Governor and the CBN Deputy Governor of Financial System Stability respectively, and establishment of a Financial Inclusion Secretariat, (now Financial Inclusion Delivery Unit within the Development Finance Department of the CBN).

“The FIDU acts as a critical coordinating unit for the NFISC, the NFITC and the Working Groups and State chapter coordinators,” she explained.

According to Ahmad, these committees and groups are comprised of a cross section of stakeholders in the public and private sector including financial and other regulators including the CBN, Securities & Exchange Commission (SEC), Nigeria Deposit Insurance Commission (NDIC), National Pension Commission (PENCOM), and the National Insurance Commission (NAICOM), Nigerian Communication Commission (NCC).

Others are Ministries, Departments and Agencies (Youth & Sports Development, Women Affairs & Social Development, Communications & Digital Economy, Finance, Education and Information & Culture). Private sector stakeholders include Deposit money banks, telecommunications companies, mobile money companies, insurance operators, pension fund operators, fund managers, as well as partners from multilateral institutions, think thanks, the academia, among others.

“The NFIS is a foundational policy framework referenced by the entire national ecosystem of policy makers, operators, government and other stakeholders, sets out the country target, strategies to achieve the target, initiatives, policies, products and services that ensure achievement of the target.

“Since its first launch in 2012, Nigeria’s NFIS has continued to transform over the years. The CBN has launched two editions prior to the third version which was launched this morning at the opening ceremony of the 2022 International Financial Inclusion Conference – The NFIS 3.0. All three editions identified national priorities for financial inclusion and policy frameworks for resolving the most pressing barriers to financial inclusion, scaling financial inclusion across the country, whilst defining a focus for the future to achieve the set target,” she said.