CBN And Financial Inclusion Drive In Nigeria

Experts see financial inclusion as the availability and equality of opportunities to access financial services.
It is a process by which individuals and businesses can access appropriate, affordable, and timely financial products and services, including banking, loans, equity, and insurance products.
The Central Bank of Nigeria (CBN) defines financial inclusion as an ideal state “when adult Nigerians have easy access to a broad range of formal financial services.”
Financial inclusion services are mostly targeted at the unbanked and underbanked individuals, especially at the grassroots.
The United Nations defines the goals of financial inclusion as access at a reasonable cost for all households to a full range of financial services, including savings or deposit services, payment and transfer services, credit, and insurance.
Financial inclusion has also been identified as an enabler for 7 of the 17 Sustainable Development Goals.
Despite the progress so far made towards financial inclusion globally, reports have it that about 1.4 billion adults (24%) are unbanked or excluded from the formal financial system.
In Nigeria, the overall financial inclusion target was 80% by 2020, but only 64% of Nigerian adults were financially included by the end of 2020.
This means that 36% of Nigerian adults, or 38 million adults, remain completely financially excluded.
Women continue to be more financially excluded than men, with only 45% of women using formal financial services, compared with 56% of men.
In a survey conducted byEFInA (Enhancing Financial Innovation & Access) in 2020,and covered over 20,000 consumers nationwide revealed that 51% of Nigerian adults were using formal financial services, such as banks, insurance, and pensions.However, 36.6 million adults, representing 36.8% of the adult population, are financially excluded.
The survey also highlighted opportunities to extend financial services to the unbanked and under-banked low-income segments in the country.
The 2020 survey also provided insights on pension and financial inclusion in Nigeria.
Only 7% of Nigerian adults have pension accounts, but 24 million adults without pensions are making regular savings for their retirement.Additionally, only 2% of Nigerian adults are insured, but 18 million uninsured adults say they would be interested in microinsurance.
To change the ugly story, theCBN vowed to bridge the financial inclusion gap in the country.
In 2022, Nigeria had achieved a financial inclusion rate of 64%. The CBN had set a target to scale payments to 70% and savings to 60% by 2020. While the target for payments was achieved, the target for savings was not met.
CBN has not relented in its efforts to bridge the gap. It has been at the forefront of the efforts to drive financial inclusion in Nigeria by championing the development and implementation of Nigeria’s National Financial Inclusion Strategy.
The strategy aims to reach 95% of Nigerians with formal financial services by 2024.
In fact, theNational Financial Inclusion Governance Committees in Nigeria was established to accelerate financial inclusion in the country.
The Financial Inclusion Technical Committee meets biannually to review progress and provide strategic direction for stakeholders.
The steering committee includes members from the CBN, Federal Ministry of Finance, Nigeria Deposit Insurance Corporation (NDIC), National Insurance Commission (NAICON), and other relevant agencies.
Steps Taken By CBN To Bridge Financial Inclusion Gap
CBN has taken several steps to bridge the financial inclusion gap in the country.
The apex bank adopted the National Financial Inclusion Strategy (NFIS) in 2012, which was revised in 2018 to prioritize foundational constraints, innovation, and the creation of an enabling environment to promote financial inclusion.
The revised strategy was built on four strategic areas of agency banking, mobile banking/mobile payments, linkage models, and client empowerment. The four priority areas are:
Creating a conducive environment for the expansion of digital financial services (DFS).
Promoting rapid growth of agent networks.
Harmonizing Know Your Customer (KYC) requirements to increase access to financial services.
Creating an environment conducive to serving the most excluded.
The CBN has also partnered with organizations such as the Bill and Melinda Gates Foundation and Women’s World Banking to drive financial inclusion for women in Nigeria.
Additionally, the CBN has recognized the importance of technology in promoting financial inclusion and has taken steps to leverage it to expand access to financial services.
The CBN’s efforts to bridge the financial inclusion gap are crucial in reducing poverty and ensuring sustainable income for Nigerians.

Some Identified Challenges To financial inclusion Efforts In Nigeria
Some of the identified challenges to financial inclusion in Nigeria include poverty, education, and literacy levels, which often overlap with the rural-urban divide.

Others are:
Low financial literacy: Many Nigerians lack the knowledge and skills needed to access and use financial services effectively.
Inadequate infrastructure: Inadequate and inefficient technology-based facilities by financial institutions limit the achievement of significant expansion in financial inclusion level in Nigeria.
Limited access to technology: Many Nigerians lack access to technology, such as smartphones and the internet, which are necessary for accessing digital financial services.
Limited trust in formal financial institutions: Many Nigerians do not trust formal financial institutions, which can limit their willingness to use financial services
Lack of required documentation: Many Nigerians lack the required documentation, such as a government-issued ID, to open a bank account.
Limited access to financial services: More than half of Nigerian adults don’t have close proximity access to financial services such as ATMs, banks, or service kiosks.
High cost of doing business: The cost of doing business in Nigeria is high due to unreliable power supply, high cost of energy, insufficient credit bureaus, and other factors.
Just recently, the CBN and partner agencies within the National Financial Inclusion Governance Committees announced the second edition of the International Financial Inclusion Conference (#IFIC2023) holding this month in Nigeria
The IFIC 2023 is an engagement platform for global thought leaders, regulators, and other stakeholders to discuss and collaborate on contemporary strategies for accelerating financial inclusion in the African continent and globally.
CBN says Dr. Chea Serey, Governor of the National Bank of Cambodia; Dr. Alfred Hannig, Executive Director, Alliance for Financial Inclusion; and Dr. Reza Baqir, former Governor of the State Bank of Pakistan would be speaking at the Conference.