Nigeria: CBN to improve access to financial services by 26.3%
By Kingsley Ighomwenghian, Daily Independent
The Central Bank of Nigeria (CBN), at the weekend released a draft of the National Financial Inclusion Strategy that aims to decrease the number of Nigerians without access to financial services by 26.3 per cent from the present 46.3 to 20 per cent by year 2020.
The CBN in a circular titled CFP/DIR/GEN/CIR/01/001 signed by U.A. Dutse, for Director, Consumer and Financial Protection Department, explained that the framework aims “at educating the Nigerian populace to improve their understanding of financial products, develop their skills and confidence to become more aware of financial risks and opportunities.”
The report quoted EFInA (201) survey as estimating that Nigeria’s 46.3 per cent of the population do not have access to any form of financial services, compared to those of other African countries like South Africa, 24 per cent; Uganda, 30 percent; Botswana and Kenya, 33 per cent; and Ghana, 44 per cent.
The report also noted that “only 36 per cent of Nigerians used payment services, 24 per cent savings services, 5 per cent pension, and 1 per cent insurance.”
The CBN, while acknowledging the financial empowerment of the population, especially the rural and urban poor through financial inclusion blamed lack of knowledge of the service providers, services provided, terms and conditions and the benefits derivable from accessing the services, for the dismal financial access situation.
“The result of various studies and workshops organized on financial inclusion strategies indicated that financial literacy is a pre-condition for the attainment of the goals of the financial inclusion.
“Studies also confirm that aside from individuals currently excluded from the financial markets, the financial included and the financial services providers also suffer from a dearth of understanding of the risks associated with many financial products on offer,” the draft noted.
The draft already discussed by the Bankers’ Committee, the CBN said, has objectives such as raising individual knowledge and skills to make sound financial decisions through better understanding and appreciation of the risk/reward trade-off in investment choices.
The framework is also to help financially excluded individuals to know, understand and access financial products and services at affordable costs; while helping individuals/businesses understand their rights and obligations when they enter into loan contracts and other forms of financial transactions in order to minimize credit risk in the financial system and protect consumers; among others.