Tweaking Nigeria’s financial inclusion strategy

Nigeria's journey towards achieving an 80 percent financial inclusion rate for the adult population by 2020, as outlined in the National Financial Inclusion strategy in 2012, faces challenges. The Central Bank of Nigeria (CBN) acknowledges that the country is not on track to meet this target, prompting a much-needed review of the financial inclusion strategy. In a recent interview on CNBC Africa, Lehle Balde, a Financial Inclusion Advocate at Businessday, shared insights on how Nigeria can enhance its strategy to serve more adults economically. Balde highlighted key areas for improvement, such as leveraging digital accounts, enhancing economic inclusion strategies, and optimizing agency banking. One of the primary obstacles to financial inclusion in Nigeria is the country's vast geographical landscape. With rural areas often underserved by traditional banks due to logistical challenges, the CBN has taken proactive steps by partnering with the National Communications Commission to accelerate the adoption of digital accounts. This collaboration aims to overcome physical barriers and expand financial services to remote regions. Balde emphasized the importance of setting clear targets and implementing effective roadmaps to navigate evolving economic and technological landscapes, underscoring the necessity of periodic strategy revisions. The Memorandum of Understanding (MOU) between the CBN and the National Communications Commission signals a potential game-changer in Nigeria's financial inclusion journey. Drawing a parallel to successful models in countries like Kenya, where telcos played a pivotal role in driving financial inclusion, Balde highlighted the uniqueness of each market and the need for tailored strategies. While acknowledging the success of the M-Pesa model in Kenya, she cautioned against a one-size-fits-all approach, emphasizing the relevance of contextual solutions for Nigeria's financial ecosystem. Beyond standalone financial inclusion efforts, Balde stressed the importance of integrating economic inclusion strategies at the national and state levels. By aligning economic policies with financial inclusion initiatives, governments can create synergies that empower businesses and individuals. Viewing financial access as a catalyst for economic advancement, she advocated for a holistic approach that marries economic and financial inclusion seamlessly. Balde echoed sentiments shared by industry leaders, emphasizing the symbiotic relationship between economic and financial inclusion in driving sustainable growth and prosperity. While Nigeria has made strides in implementing agency banking as a means to extend financial services to underserved communities, Balde emphasized the need for accelerated progress in this area. Recognizing the pivotal role of agent banking in bridging the accessibility gap, she called for heightened accountability within the financial sector to ensure the effective deployment of agents and compliance with set targets. Balde underscored the importance of regulatory oversight in promoting transparency and incentivizing financial institutions to prioritize financial inclusion as a core objective. In conclusion, Nigeria's recalibration of its financial inclusion strategy holds promise for expanding access to financial services and fostering economic empowerment among its population. By leveraging digital innovations, integrating economic inclusion policies, and optimizing agent banking networks, Nigeria can chart a path towards a more inclusive and prosperous financial landscape. The ongoing dialogue and collaborative efforts between regulatory bodies, financial institutions, and telecommunications stakeholders are crucial in driving meaningful change and propelling Nigeria towards its financial inclusion goals.