THE FUTURE OF FINANCIAL INCLUSION

How to Deliver 95% in Nigeria by 2024

According to the World Bank, financial inclusion is achieved when individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way. Hence, financial access facilitates day-to-day living, and helps families and businesses plan for everything from long-term goals to unexpected emergencies.

However, achieving set objectives in Nigeria has been a long haul despite various strategies and innovations to expand financial access. At a financial inclusion rate slightly above 63% and a new financial inclusion target set at 95% by 2024 in the CBN’s 5-year plan (2019 -2024), there is a need to review several factors that can aid or impair the achievement of this target. These include:

• The current portfolio of products and services
• The size, characteristics, gap and potential of the market
• Availability of data and its use in developing products and deploying resources
• The state of business operations and service delivery
• Balancing the demand and supply sides

The World Bank Group noted that countries that have achieved the most progress toward financial inclusion have either allowed mobile financial services to thrive, welcomed new business models such as leveraging e-commerce data for financial  inclusion or taken a strategic approach by Implementing a national financial inclusion strategy (NFIS) which brings together different stakeholders.

Agency banking, mobile money, USSD banking, POS cash-in-cash-out etc., have hitherto been used to drive financial inclusion in Nigeria. More recently, Payment Service Banks (PSBs) were also introduced to accelerate the efforts. There has also been the contribution of Fintechs developing and iterating digital financial products to augment and digitize traditional services like loans, savings, insurance, payments, remittance etc.

Available data reveals:

• Unbanked population of 60.1 million – with 36.6 million financially excluded
• 26.8 million men are currently unbanked – with 16.2 million financially excluded
• 33.3 million women are currently unbanked – with 20.5 million financially excluded
• 47% of financially excluded adults are between ages 18-25 years
• 14.4 million urban residents are unbanked – with 7.9 million financially excluded
• 45.7 million rural residents are unbanked – with 28.8 million financially excluded
• The North-west zone has 62% of its 23 million adult population financially excluded

The North-east zone has 55% of its 12 million population financially excluded.

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