Many people continue to use informal financial services even as they increase use of formal services. What lessons do robust forms of informal services have for formal service providers?
According to the Central Bank of Nigeria, about 46.3% of the Nigerian adult population are excluded from financial services. This could be due to several reasons including low trust level, poor understanding of the banking system, low financial literacy level, poor financial power, inflexible bank policies, low financial technology penetration level, and a lack of tailored services to meet the needs of financially excluded adults. Due to the foregoing, financial services in developing countries like Nigeria are missing out on a big chunk of money in the economy. It is, therefore, expedient that financial services start thinking about methods, technology, and strategies for financial inclusion.
The global pursuit of financial inclusion as a vehicle for economic development had a positive effect in Nigeria as the exclusion rate reduced from 53.0 % in 2008 to 46.3 % in 2010. In 2012, the Central Bank of Nigeria launched the National Financial Inclusion Strategy with a target of reducing the exclusion rate to 20% by 2020. At the same time, adult population with access to payment services would increase to 70%.
Financial inclusion aims to grant individuals, households and businesses, irrespective of income level, access to appropriate and affordable financial services products. Financial inclusion is a key enabler to reducing poverty and boosting prosperity. Financial education is crucial to the future and stability of the financial system, to increase financial inclusion.
For this panel discussion; key questions to be discussed are:
- How can more opportunities be created for people to save and borrow in developing economies How can financial service providers increase the number of people using the bank?
- Can banks provide financial services to people with low literacy level?
- How can financial service providers customise their products to overcome challenges faced in banking the previously unbanked adult population in Nigeria?
- What expertise and innovation can Microfinance banks, commercial banks, FinTech industries, and policy makers offer to reach the over 50 million unbanked Nigerians.
- How do we measure success in financial inclusion?
