CBN sure of 20% reduction in financial exclusion by 2020.
Challenges notwithstanding, the Central Bank of Nigeria (CBN) is confident that its target of narrowing the level of financial exclusion in Nigeria to a manageable 20 percent is achievable in 2020.
At the moment, the level of the financially excluded is estimated at 40 percent. This is down from the survey conducted in the country in 2008 by a development finance organization, which revealed that about 53.0 percent of adults were excluded from financial services.
At the national financial literacy stakeholders conference in Abuja yesterday, the Deputy Governor, Financial System Stability (FSS) of the CBN, Mrs. Aisha Ahmed, who represented the CBN governor, identified some of the challenges which might militate against meeting the target as privacy and security concerns requiring enhanced privacy and data protection for consumers, and exposure to new and more inventive fraudulent practices which requires stakeholders to double their combat efforts.
Consumers, she said, “are confronted with multiplicity of information which may lead to information processing errors. As such, concerns around accuracy, reliability of information, as well as transparency, continue to grow; while the industry is also faced with an increasing complexity of financial products and services accompanied by consumers’ lack of information or capacity to understand such products and/ or their associated risks. Thus enhanced disclosure has become very essential.”
To address these challenges, Ahmed said that the CBN had collaborated with the Bill and Melinda Gates Foundation to revise the strategy to help it meet the 2020 target of reaching 80 percent financial inclusion in the country.
“During the course of implementing the National Financial Inclusion Strategy (NFIS) which was launched by the President in October 2012, the need arose for the review of the strategy to meet the challenges and re-assess the developments and the current realities, of the ever-evolving environment in which we operate,” she said.
On the importance of financial literacy in meeting the target, the CBN said: “Adequate consumer protection is critical to sustaining the long term viability of the financial sector because consumer protection is a necessary precursor to building and maintaining trust in the formal financial sector, which in itself is vital for healthy financial sector evolution.
“The benefits of a financially literate population are immense. Consumers are better equipped to make optimal choices in the use of financial products, pose lower credit and default risk, constitute a market for sustainable financial services and products, reinforce competitive pressure on financial institutions for better products and services, and promote financial system stability by increasing market demand and responsible use of financial services.