A
national micro-finance bank is to be established to promote access to credit
finance for small, medium enterprises (SMEs) and other unbanked groups in the
country, the Central Bank of Nigeria (CBN) said on Thursday.
The CBN governor, Godwin Emefiele,
who announced this in Abuja, said the bank will be established in collaboration
with the Bankers Committee, the Nigeria Incentive-based Risk Sharing System for
Agricultural Lending (NIRSAL) and the Nigerian Postal Service (NIPOST).
Mr Emefiele was represented by the
deputy governor, Financial Systems Stability of the CBN, Aishah Ahmad, at the
maiden two-day National Financial Literacy Stakeholders’ conference organised
by the bank in Abuja.
The CBN governor said the new
national MFB which shall be technology driven will leverage on the NIPOST’s
presence in 774 local government areas of the country to reach its target
beneficiaries.
“The bank will serve as an efficient
channel for the disbursement and monitoring of key intervention funds by the
CBN, such as the Anchor Borrowers fund, SME fund, etc, to farmers and SMEs at
the grassroots level,” Mr Emefiele said.
He said the conference will provide
the platform for participants to deliberate on key imperatives for achieving
the country’s financial inclusion targets, promoting financial stability and
entrenching sustainable and inclusive economic growth.
The theme of the conference,
“Implementing Financial Literacy and Consumer Protection to advance Financial
Inclusion in Nigeria”, the CBN governor noted, was selected to help focus on
the need to redress the challenges limiting financial inclusion in the country.
Building an inclusive financial
system, he said, has positively impacted efforts towards poverty reduction and
enhancement of economic prosperity.
Following the launch of a National
Financial Inclusion Strategy in 2012, Mr Emefiele said the federal government
set a target to achieve 20 per cent financial exclusion rate in the country by
2020.
He said the latest access to
financial services survey showed about 36.8 per cent of eligible Nigerian
adults do not have access to financial services, down from 41.6 per cent in
2016.
Despite
the improvement, the CBN governor said more effort was necessary to achieve the
overall 20 per cent target exclusion rate by 2020.
The
revised National Financial Inclusion Strategy, which was launched at the
opening session of the conference, he said, identified consumer protection and
consumer education as critical to the attainment of financial inclusion.
He said
adequate consumer protection will help sustain the long term viability of the
financial sector, while consumer education will thrive on the foundation of
financial literacy.
“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,” he said
On the
impact of technological advancement on the financial system, he said new
digital products and services have emerged, with the internet greatly
influencing consumers’ purchasing decisions on e-commerce.
In
2017, he said the banking industry processed about 1.4 billion electronic
transactions valued at N97.4 trillion, against 869 million transactions valued
at N69.1 trillion in 2016.
Regardless,
he said these positive developments in aid of financial inclusion are
associated with challenges, namely privacy and security concerns; exposure to
new and more inventive fraudulent practices, and multiplicity of information
leading to information processing errors.
To
provide the framework for financial inclusion in the country, the CBN governor
launched four policy documents, namely the Revised National Financial Inclusion
Strategy; Consumer Protection Framework as well as National Financial Literacy
Framework and National Financial Education Strategy.
While
the Consumer Protection Framework will provide policy direction for a robust
consumer protection regime in the banking and financial services industry, the
National Financial Literacy Framework will provide a roadmap for the
implementation of various financial literacy programmes for various target groups
in the country.
Earlier,
the Director, Consumer Protection Department, CBN
Kofo
Salam-Alada, said efforts toward financial inclusion have been limited by the
challenge of financial literacy and awareness amongst consumers and a general
lack of confidence in dealing with financial institutions.
Mr
Salam-Alada said these issues can only be addressed through robust financial
literacy and consumer protection programmes.
“If
consumers are not adequately protected – if they are constantly having
unresolved issues with their financial services providers, they are bound to be
apathetic towards the system. This will negatively affect the financial
inclusion rate and ultimately the stability of the financial system,” he said.
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