Over 70 per cent of bank customers in the North East, and some areas in the North West, have, so far, not been able to access financial services in an appropriate form, owing to raging insurgencies in these parts of the country, The Point has learnt.
According to a document obtained by our correspondent, the financially excluded adults in the North East region in 2012 rose from 60 per cent to 62 per cent in 2014, and 68 per cent in 2016. This year, experts say the percentage has soared above 70.
Also, in a paper presented by the Head, Financial Inclusion Secretariat, Central Bank of Nigeria, Mrs. Temitope Akin-Fadeyi, at a recent workshop for financial journalists, she said that the financial exclusion rate across crisis-prone areas in the North West and North Central increased from 30 per cent in 2012 to 70 per cent as at the end of 2016.
In the North West, the rate rose from 62 per cent, to 64 per cent and then, to 70 per cent within the period under review. North Central’s data increased from 32 per cent in 2012 to 33 per cent in 2014 and finally, to 39 per cent in 2016.
While we know there is a serious problem, there is a major gap in our understanding of the root causes of financial exclusion and under-provision, and what interventions are actually at work, to overcome the underlying causes
Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs like transactions, payments, savings, credit, and insurance; delivered in a responsible and sustainable way.
Access to a transaction account is a first step toward broader financial inclusion since it allows people to store money, send and receive payments. A transaction account can also serve as a gateway to other financial services, which is why ensuring that people worldwide can have access to a transaction account is the focus of the World Bank Group’s Universal Financial Access 2020 initiative.
A 2016 survey, conducted by an independent firm, Enhancing Financial Innovation and Access, which is funded by the United Kingdom’s Department for International Development and the Bill & Melinda Gates Foundation, revealed that the financial exclusion rate rose from 39.5 per cent as at 2014 to 41.6 per cent in 2016.
The survey, tagged, “Access to Financial Services in Nigeria”, found that 40.1 million, out of Nigeria’s 96.4 million adults were financially excluded in 2016, compared to 36.9 million adults recorded in 2014.
A professor of Economics, Department of Banking and Finance, Nasarawa State University, Mr. Uche Uwaleke, said, “Prioritising intervention, creating awareness to ensure patronage, incorporating non-interest financial services into CBN intervention programmes and mobilising banks that offer such products for greater outreach and impact, are some of the areas that must be covered.
“Other areas include massively rolling out agent networks and creating awareness to increase adoption of digital financial services as simple, flexible and easy alternative channels for reaching remote areas and rural hinterland.”
Enumerating some of the existing challenges that are likely to confront the strategy, a financial analyst and a fund manager, Mr. Francis Ekundayo, explained that the existence of multiple literacy campaign programmes, which results in duplication of efforts and the risk of conflicting messages, indicated the absence of secure and sustainable funding structure for harmonised financial literacy sensitisation programme in the country.
“While we know there is a serious problem, there is a major gap in our understanding of the root causes of financial exclusion and under-provision, and what interventions are actually at work, to overcome the underlying causes. Moreover, there are major gaps in our understanding of how exclusion affects specific groups of consumers or regions in the country,” he
The Director-General, West African Institute for Financial and Economic Management, Prof. Ekpo Akpan, explained that a combination of low disposable incomes and the economics of access in
retail financial services meant that these groups of people were not commercially viable for mainstream retail financial
“Alternatively, consumers may face actual exclusion because of disability. In this case, there may be limits to what the market can provide and innovative solutions and alternative business models may be needed to change the economics of access or remove the barriers to access and develop affordable, accessible products and services,” he said.
RATE UNACCEPTABLE, CBN LAMENTS
The apex bank has been at the forefront of driving financial inclusion in Nigeria, launching multiple initiatives such as the Financial Inclusion Strategy, the Cashless Policy, and the Micro, Small and Medium Enterprises Development Fund.
Other initiatives are the new Electronic Identity Cards championed by the National Identity Management Commission, which might grant Nigerians more access to financial services.
The Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, admitted that the apex bank considered the rate unacceptable for a country that wants to attain the status of a financial hub of West Africa by 2020.
She said, “The target of banks is for the country to attain 80 per cent financial inclusion by the year 2020. This means that about six million people would be captured in the banking system every year, or eight per cent of the Nigerian population.
To achieve this, she said that banks had been mandated by the CBN to increase customer base, customer savings and block operation leakages in the system. Other strategies include creating awareness on electronic banking, agent banking and expanding rural banking in the country.
Also, Head, Financial Inclusion Secretariat, CBN, Mrs. Temitope Akin-Fadeyi, said, “It is something we are doing, not just as CBN, but for the whole of Nigeria. It is about improving the lives of our people. It is actually about empowering people through access to finance, because when people have access to finance, they can take decisions to improve their lives. In the first stage, we are focusing on five services; payments, savings, loans, insurance and pension. We believe that all Nigerians should have access to these
Akin-Fadeyi revealed that the campaign would soon be taken to the local government levels as the CBN sought more stakeholders in the sector.
The CBN Governor, Mr. Godwin Emefiele, had said that the national financial inclusion strategy was being reviewed for greater effectiveness and impact, and that stakeholders would be sufficiently mobilised to participate.