Financial inclusion simply put, means bringing those who are currently not enjoying financial services such as savings, credit, payment, pensions, insurance, remittances amongst others into the financial system and by so doing, access and use such services for economic /other activities that better their lots. -CBN
The Wikipedia defines Financial inclusion or inclusive financing as the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society, in contrast to financial exclusion where those services are not available or affordable.
Financial inclusion in Nigerian or third world concept can be defined as bringing into the formal financial system adult that were excluded as a result of lack of knowledge/illiteracy or patronage of the informal or communal financial system.
Financial inclusion has continued to assume increasing recognition across the globe among policy makers, researchers and development oriented agencies. Its importance derives from the promise it holds as a tool for economic development, particularly in the areas of poverty reduction, employment generation, wealth creation and improving welfare and general standard of living.
The Apex bank in collaboration with major stakeholders launched the National Financial Inclusion Strategy in 2012 with the aim of reducing exclusion rate from 43.3% in 2010 to 20% by 2020. Specifically, adult Nigerians with access to payment services is to increase from 21.6% in 2010 to 70% in 2020, while those with access to savings should increase from 24.0% to 60%; and Credit from 2% to 40%, Insurance from 1% to 40% and Pensions from 5% to 40%, within the same period.
CBN also intends to improve the channels for delivering the financial services, with bank branches targeted to increase from 6.8 units per 100,000 adults in 2010 to 7.6 units per 100,000 adults in 2020, Microfinance bank branches to increase from 2.9 units to 5.5 units; ATMs also from 11.8 units to 203.6 units, POSs from 13.3 units to 850 units, Mobile agents from 0 to 62 units, all per 100,000 adults between 2010 and 2020.
The major tools for driving the Initiatives are:
- Tiered Know Your Customer(KYC)
- Agent Banking/ Agency Banking
- Micro Small and Medium Enterprises.(MSME) Development Fund
- Financial Literacy
- Mobile Money Operation
- Consumer Protection
- Credit Enhancement Program
The CBN is yet to release the framework for Consumer Protection and Credit Enhancement Program which are also part of the tools to drive the Initiative.