The Nigerian Deposit Insurance Corporation (NDIC) has said the country will achieve 80 percent financial inclusion rate by year 2020 as according it, financial inclusion remains critical to economic growth and development.
Mr. Sunday Oluyemi, Director, Communications and Public Affairs Department, NDIC who stated this on Wednesday at the ongoing 2019 NDIC/FICAN (Finance Correspondents Association of Nigeria) workshop in Yola, Adamawa State, noted that financial exclusion can be detrimental to the any nation’s development.
Delivering a lecture titled: “The role of banks in financial literacy and financial inclusion,” Mr. Oluyemi identified lack of financial literacy as a major hindrance to financial inclusion.
He pointed out that it is also as a result of lack of adequate financial literacy that people fall prey to fraudsters who request for banking details of unsuspecting members of the public under the guise of helping them to resolve issues with their accounts.
He pointed out that, “no bank will send you a mail for you to update your information online. If they want you to do it, your account officer will contact you. I’m appealing to you, once you see that kind of link, don’t click.”
According to Oluyemi, “The biggest problem of financial inclusion is financial literacy, that’s why we are joining it up. If you don’t know these things, there will be problems. When we are talking about financial inclusion, we talk about financial literacy because we want you to know your roles and responsibilities.
“Financial exclusion can be quite detrimental to the nation’s development. If people don’t have access to financial services, the tendency is that they will keep their money in their houses and the money in their houses can never contribute to economic growth and development. They will not also have access to credit.
“Financial inclusion is a critical ingredient for the economic growth and poverty reduction. If you want to reduce poverty in Nigeria, let people have access to credit. We also understand that there are people who, when they have access to money, they will use it to marry more wives, but there are people that genuinely need these monies. It’s just for the system to find a way of identifying these people and make sure that they have access to the money.”
Oluyemi expressed confidence that through the various efforts of the NDIC as well as the other institutions such as microfinance banks, telecommunications companies and so on, the rate of financial exclusion will be reduced to 20 percent next year.
“We may not be able to get 100 percent because some people may not be able to get in. But we are making all efforts to reach all the reachables. Our target is to reduce the rate of financial exclusion to 20 percent by 2020, and that’s what we are focusing on now,” he said.
“There are some initiatives that we are taking, such as know your customer, and that’s why financial inclusion there is tier one, there is tier two where some people will just need voters card. In some areas, your voters card only is enough to identify you.
“Then there is agency banking, which is also helping. Part of the problem is that people don’t have access to money. Then you have national financial literacy framework to educate people. The Central Bank is doing a lot through this initiative. In our own capacity, we have world savings day every October. We are focusing on the upcoming generation to teach them financial literacy, the importance of savings and so on.
“Then we have consumer protection laws that can give you confidence that if you have any issues, you can get them redressed. Then you have the cashless policy initiative.
“Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending ( NIRSAL) is also making funds available to people.
“Financial inclusion can be delivered to the poor and unbanked people through different service providers, cooperative societies, insurance, telecommunications and wire services. The telcos are trying to come into the system. Point of Sale (POS) is also helping. If you come to this environment without cash, through PoS you can get cash.
“The post offices, through the central bank are being converted to NISRA microfinance banks so that more people will have access to financial services.”