2020 financial inclusion target on course, but slow, says report

The challenge of achieving 80 per cent financial inclusion rate in Nigeria still on course, though a progress report showed stagnation between 2014 and 2016.

This was due largely to slow migration to the formal sector by adults already captured in the informal sector, estimated at 60.5 per cent in 2014 and later 58.4 per cent in 2016.

Consequently, the expected leap in the contribution of the financial sector to the nation’s Gross Domestic Product (GDP) and fight against extreme poverty may fall far below projections.

The development, which indicates a two-fold outcome of increased mortality as well as adult population and disinterest, comes in the wake of a challenging three-year economic crisis and poor infrastructure needed to drive the scheme.

This is also coming despite several international commitments and interventions by regulatory authorities and buy-in by some local financial institutions.

Specifically, the 2016 report of the National Financial Inclusion Strategy Implementation yesterday showed that the slow pace had rubbed off on all parameters.

Citing the report of the Enhancing Financial Inclusion and Access to Financial Services in Nigeria 2016 Survey, the Central Bank of Nigeria put the formal inclusion rate at 48.6 per cent between 2014 and 2016, although it represented an achievement of 86 per cent target for the period under review.

However, the overall financial inclusion rate, which also considers adult Nigerians who use informal financial services, only decreased by 2.1 per cent in three years.

The report said the reverse was due to a decline in the adult population segment that uses informal financial services only. Achievement stood at 84 per cent during the period.

On the other hand, the percentage of adults owning a commercial bank account, proxied by the percentage of adults having a Bank Verification Number (BVN), increased from 23.6 per cent in 2015 to 28 per cent in 2016.