By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE) -The Central Bank of Nigeria (CBN) has unveiled a document on its proposed financial inclusion strategy.
The CBN in its executive summary of the document said it intends with other stakeholders to implement the financial inclusion in a way that there will be reduction in the percentage of adult Nigerians that are excluded from financial services from 46.3 percent (46.3%) in 2010 to 20% by 2020.
While the number of Nigerians included in the formal sector will increase from 36.3% in 2010 to 70% by 2020.
The CBN says the goal will be pursued through a broad range of coordinated interventions, with high priority on the following:
Transformation of existing Know Your Customer (KYC) regulations into a simplified risk based tiered framework that allows individuals who do not currently meet formal identification requirements to enter the banking system.
The CBN says it will develop and implement a Regulatory Framework for Agent Banking to enable financial institutions bring banking services to the unbanked in all parts of the country.
Also, it intends to develop and implement a National Financial Literacy Framework to increase awareness and understanding of financial products and services, with the ultimate goal of increasing sustainable usage.
Nigeria’s Central Bank says it will implement a comprehensive Consumer Protection Framework to safeguard the interest of clients and sustain confidence in the financial sector.
Other coordinated interventions to achieve financial inclusion are continued pursuance of Mobile Payment System and other Cash-less Policies to reduce the cost and increase the ease of financial services and transactions.
The CBN also intends to implement Credit Enhancement Schemes/Programmes to empower micro, small, and medium enterprises (MSMEs).
In conclusion, the CBN said financial inclusion is critical to achieving its mandate and Nigeria’s overall economic development.
‘’As of 2010, 46.3% of adult Nigerians were excluded from financial services. The key barriers to financial inclusion include long distances to access points, cumbersome eligibility requirements, low levels of financial literacy, and the high cost of financial services, among others,’’ the CBN said.
Nigeria’s Central Bank affirmed that these barriers underscore the need to develop a National Financial Inclusion Strategy, the primary aim of which is to reduce the financial exclusion rate of adults to 20% by 2020.
The CBN said the key initiatives in the Strategy include a tiered approach to KYC, agent banking, mobile payments, cash-less policy, a financial literacy framework, consumer protection, and the implementation of credit enhancement schemes and programmes.
The CBN further affirmed that specific targets have been set for payments, savings, credit, insurance, pensions, DMB and MFB branches, ATMs, POS, banking agents, and youth and women.
‘’A variety of stakeholders have been identified to supporting the Strategy and the CBN will need to take a lead role in coordinating and promoting the Strategy in order to achieve its goals and objectives.
