63.2% up, 16.8% to go…
The year 2018 ended on a high with financial inclusion in Nigeria increasing to 63.2% from 58.4% in previous measurement year. Year 2019 started with a renewed vigor and determination by stakeholders to work collaboratively in ensuring the outstanding gap of 16.8% was closed within the next two years.
To that effect the year largely focused on developing high impact policies and initiative that would facilitate the attainment of the inclusion objective, by addressing specific gap in disproportionately excluded demographics like women, youth, rural dwellers MSMEs and Northern Nigeria.
While 2019 was not a measurement year, stakeholders put a robust framework on ground to ensure progress is appropriately tracked and deviations are timely corrected to ensure the successful implementation of planned initiative and to remain on track for year 2020.
Unlocking innovative channels and addressing underlying issues in the Digital Financial Services Ecosystem
The Payment Service Bank (PSB) Licensing and Regulatory framework that was issued in 2018 led to an increase activity of some innovative promoters that wanted to come into the financial services space to extend the rails of financial services to the unbanked. This led to the issuance of Approval in Principle (AIP) licenses to three promoters.
A functional Id system is a critical foundational infrastructure for the expansion of the Digital Financial Services (DFS) frontier to hitherto unreached. To underscore the importance of DFS to Financial Inclusion, The Federal Government through the National Identity Management Commission (NIMC), a key stakeholder in the financial inclusion space, adopted September 16th as National Identity day.
This would enhance the World Bank assisted ID for development project and ultimately lead to more financial inclusion through DFS.
Furthermore, one major concern for DFS adoption is pricing and consumer protection. Towards the end of the year, the Central Bank of Nigeria released the revised Guide to Bank charges which sort to address both concerns.
The drive to expand the agent network saw Shared Agent Network Expansion Facility (SANEF) increase its agent acquisition year on year by 184% by driving activities of agents onboarded from 83,560 as at December 2018 to 236,940 by year end, 2019.
A year of focus on addressing the Financial Inclusion Gender gap
The financial inclusion gender gap persisted at 9% between 2014 and 2017 according to the Global Findex Survey. Women often face peculiar challenges in accessing financial products and services hindering the effective contribution of 50% of the global population to growth and development.
In 2018, the Nigerian Financial exclusion rate stood at 36.8% with 41.1% of women financially excluded in comparison to 32.6% of men. The gender Financial Inclusion gap in Nigeria therefore stands at 8.5%.
In 2019, as part of efforts to achieve 80% financial Inclusion in Nigeria, a Financial inclusion Gender desk was established within the Financial Inclusion Secretariat to drive implementation of policies, schemes and interventions targeted at improving women’s access to finance.
One major achievement of the gender desk was conducting a gender landscape study in conjunction with Enhancing Financial Innovation and Access (EFInA). The study identified lack of income, lack of education and lack of trust in the financial services as the tripod stand upon which the gender financial inclusion gap stands.
This finding a served as a fulcrum to developing policies and framework on addressing the financial inclusion gender gap in Nigeria.
Election year but relatively stable macroeconomic environment
Year 2019 is an election year. In spite of that, the economy sustained its modest growth in 2019. The growth in output was attributed, largely, to the relatively stable macroeconomic environment.
In a bid to increase lending to the real sector, CBN’s directed banks to maintain a minimum Loan-to-Deposit ratio of 60.0 per cent in July 2019 and 65.0 per cent by end-2019. The bank also funded over 1.4 Million small Holder farmers under the Anchor Borrowers programme contributing to a growth of 2.4% in the Agriculture sector compared to 2.1% in 2018.
The environment generally was enabled to facilitate financial inclusion amongst MSME one of the four disproportionately financially excluded segment in Nigeria.
The volume and value of electronic payments in 2019 rose by 46.7 and 25.5 per cent to 3,002.8 million and N167,014.32 billion, respectively, compared with 2,046.4 million and N133,042.24 billion in 2018. However, the insurance sector experienced a decline in the gross premium of the Insurance industry by 6.44 per cent to N453.6 billion in 2019 compared with the previous year.
A year of sustained collaboration for Financial Inclusion with eyes on year 2020
National Financial Inclusion stakeholders, through public-private sector collaboration embarked on a number of initiatives that would further improve the chances of meeting the financial inclusion target by 2020.
The collaboration led to some gains which include commencement of the nationwide rollout of the National Peer Group Educator Programme (NAPGEP) for Financial Inclusion, and a pilot account opening week with a total of 70,534 new accounts and 16,471 mobile wallets opened during the week.
While the year is not without its challenges, financial inclusion stakeholder from various public and private organizations are on their resolution to achieve the set financial inclusion target by December 2020.