Advancing Financial Inclusion in Nigeria: A Journey of Transformation

Financial inclusion has become a pivotal agenda in Nigeria’s economic landscape, with concerted efforts being made to bring more citizens into the financial fold. The Central Bank of Nigeria, in collaboration with the National Financial Inclusion Governance Committees, has launched new policy documents aimed at accelerating financial inclusion across the country. These policies were unveiled at the International Financial Inclusion Conference (IFIC’22), under the theme “Financial Inclusion for All: Scaling Innovative Digital Models”.

The Central Bank of Nigeria has set an ambitious target to reduce the financial exclusion rate to 20% by 2020. To achieve this, several milestones have been outlined, including increasing adult Nigerians’ access to payment services from 21.6% in 2010 to 70% in 2020. Similarly, the proportion of citizens with access to savings is expected to increase from 24.0% to 60%, and those with access to credit from 2% to 40%. The targets for insurance and pensions are set at 40%, a significant increase from the 1% and 5% respectively in 2010.

To drive this strategy, several tools have been identified, including Agent Banking, Tiered Know-Your-Customer Requirements, Financial Literacy, Consumer Protection, Linkage Banking, Implementation of the MSME Development Fund, and Credit Enhancement Programmes such as the Agricultural Credit Guarantee Scheme (ACGS) and Commercial Agricultural Credit Scheme (CACS).

However, the journey towards financial inclusion is not without its challenges. Despite the efforts, the overall exclusion rates continue to exceed the official targets, largely due to low financial literacy. To address this, experts suggest that Nigeria’s financial inclusion strategy should leverage digital instruments more systematically. Measures such as upgrading digital infrastructure, promoting incubation and sound practices of fintech firms, and improving digital financial literacy are recommended.

As Nigeria continues to navigate its path towards financial inclusion, the journey promises to be transformative, not just for the financial sector, but for the nation as a whole.