Financial Inclusion Still Poor in Nigeria

Nov 2012
Nigeria, November, 15 2012 - In spite of efforts to deepen financial inclusion in Nigeria, particularly in the rural areas, majority of the people still don't have access to financial services, the Nigerian Deposit Insurance Corporation said yesterday.

Managing Director of Nigeria Deposit Insurance Corporation (NDIC) Mr. Umaru Ibrahim is deeply concerned about the poor financial inclusion in Nigeria but expressed the hope that recent policies targeting increased financial penetration should yield significant result in 2015.

Mr. Ibrahim, who spoke yesterday at the Finance Correspondents and Business Editors workshop holding in Dutse, Jigawa State, indicated that the CBN and NDIC have an uphill task in improving financial inclusion, given the relatively low level of penetration of financial services in Nigeria.

According to the World Bank, Nigeria still under-performs most of its Sub-Saharan African peers, with the widest category of percentage of adults who borrowed from a formal financial institution in the past 12 months.

"Fifteen mobile scheme operators have so far been granted operating licenses by the CBN. The NDIC is working closely with the CBN to design an appropriate insurance to protect funds used for transaction in the new payment system. Such effort is expected to further enhance financial inclusion" the NDIC boss said.

He also indicated that agent banking system would be promoted to drive financial inclusion but the framework is still being developed.

A banking agent is a retail outlet contracted by a financial institution or a mobile network operator to process clients' transactions. Banking agents can be supermarkets, pharmacies etc.

The NDIC boss also said that microfinance banks have huge potentials of driving financial penetration and needs to be encouraged. In this regard, he called for all-women micro-finance institution, fashioned after the successful model in Kenya.

He indicated that all-women Microfinance bank has potential to promote easy access to credit amongst rural poor women, especially at the group level and could be used to mobilised large quantum of savings among the groups.

He also indicated that the north is grossly lagging behind in financial inclusion as even micro finance penetration is too poor, adding that it's a huge challenge.

Source : allAfrica

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