CBN’s financial inclusion strategies for economic development

In Nigeria, financial inclusion has grown to be a pillar of economic development plans, demonstrating how important it is in reducing poverty and promoting sustainable growth. In this race, the Central Bank of Nigeria (CBN) came up with the National Financial Inclusion Strategy (NFIS). The large rural population, which is frequently shut out of official […]

In Nigeria, financial inclusion has grown to be a pillar of economic development plans, demonstrating how important it is in reducing poverty and promoting sustainable growth. In this race, the Central Bank of Nigeria (CBN) came up with the National Financial Inclusion Strategy (NFIS).

The large rural population, which is frequently shut out of official financial institutions, is one of the main challenges. Because traditional banking facilities are primarily located in cities, rural populations rely on unofficial financial systems. This gap has started to close with the advent of agent banking and mobile banking which have provided a lifeline to those who were previously neglected. Nonetheless, the slow adoption rate is still a result of low digital literacy and low confidence in financial institutions.

Programmes for financial literacy are, therefore, necessary to enable people to make wise financial decisions. The efficient use of financial products and services is just as important to the success of financial inclusion initiatives as is their accessibility. Initiatives from the public and commercial sectors to increase financial literacy can be extremely important in this respect.

Nigeria is mandated by NFIS to guarantee that all citizens, irrespective of their socioeconomic background, have sufficient access to financial products and services. This will bridge the gap between the underprivileged and the official financial system, acting as a potent motivator for economic empowerment.

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The percentage of adults who are financially integrated has increased significantly over the past few years, rising from 68 per cent in 2020 to 74 per cent in December, 2023. Nonetheless, there is still much space for improvement to achieve the desired 95 per cent financial inclusion rate by the end of 2024.

During a national workshop on April 25, 2024, the federal government signed the Aso Accord on Economic and Financial Inclusion. The accord asks stakeholders to put policies in place to support economically engaged but impoverished Nigerians in realising their full potential. It also supplements NFIS.

This calls for a high level of dedication from sectors and institutions to hasten the nation’s 95 per cent financial inclusion rate. In order to do this, particular initiatives that foster relevant policy and market innovations must be led within their respective domains.

Financial inclusion remains a key priority for CBN, which plays a catalytic role in fostering increased investment and private sector participation in the economy, promoting specialised institutions, supporting emerging sectors, and ultimately expanding financial inclusion to the last frontier.

Actualising the financial inclusion goal, key areas need to be amplified: strengthening financial literacy and consumer protection; enhancing Digital Financial Services (DFS); improving infrastructure and channels; fostering regulatory support and innovation; leveraging diversity; and strengthening partnerships and partnerships with relevant public-private sector stakeholders.

The inclusion strategy is a crucial step towards ensuring that every Nigerian has adequate access to financial products and services, promoting inclusive growth and development. By renewing commitment to the shared financial inclusion mandate, Nigeria can create a financially inclusive country where every citizen can thrive.

 

Isa Aliyu Chiroma can be reached via [email protected]