Nigeria plans to halve the current population excluded from affordable financial products by 2020. This will see financial inclusion reaching 80 percent of the population.
The initiative is targeted at low-income segments of the society and to reach this target, the country will have to see improved investment in mobile banking technologies.
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“In terms of access to bank accounts, a little over 30 percent [of] people in the country have bank accounts, but getting involved in the financial sector is not only about the formal sector, as some participate in [the] informal sector, such as savings groups and cooperative societies,” Aishah Ahmad, Head of Retail at Diamond Bank told CNBC Africa.
Ahmad added that the amount of financial inclusion has been growing since 2008 but the challenge is that women are still excluded.
“Women are particularly disadvantaged and not as much as expected. Those excluded are largely younger and those earning lesser irregular incomes.”
The IMF says financial inclusion could help address poverty levels.
“Greater financial inclusion could help poverty alleviation efforts by buffering the impact of unexpected adverse shocks on household consumption and micro-household businesses,” read the IMF’s statement.
“Indeed, the government recognises that particular groups and sectors could be more vulnerable than others to downturns. As such, sector-specific development banks are in place as are microcredit institutions that promote small household businesses.”
The country has also been including the excluded demographic group through mobile banking technology.
Ahmad said most of the people who used informal means were traders, adding there was correlation between the level of education and access to mobile banking technology.
She also urged the financial services sector to explore ways of reaching the unbanked even without being physically present.
“Financial services firms should come up with products that are tailored towards the needs of segments they are targeting and to try and look at mobile access especially for areas where banks might not physically reach.”