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Buhari, CBN harp on importance of financial inclusion in economic development

*President Muhammadu Buhari explains how the CBN-led Anchor Borrowers Programme provides access to credit to over four million Smallholder Farmers in 36 states of Nigeria and the FCT, leading to increased financial inclusion among this underserved segment of Nigerians

Gbenga Kayode | ConsumerConnect

In line with the global payments and financial system, President Muhammadu Buhari has stated the Nigerian Government appreciates the strong impact of financial inclusion on economic growth and development in the country.

President Buhari, who said this in his address at the maiden edition of the International Financial Inclusion Conference Thursday, November 24, 2022, in Abuja, FCT, noted that his administration had provided the enabling policy environment for the initiative to yield results.

Mr. Godwin Emefiele, Governor of CBN

Muhammad Bello, Honourable Minister for the Federal Capital Territory (FCT) delivered the President’s speech at the conference, agency report said.

Buhari stated the various intervention programmes of the Federal Government, through the Central Bank of Nigeria (CBN) are meant to boost financial inclusion in the West African country.

He said: “At the outset of my administration we developed a blueprint for economic growth and development called the Economic Recovery and Growth Plan (ERGP).

“The plan was focused on economic recovery in the short-term and sustained growth and development in the long-term.”

The President also stated: “It enabled this administration, through the flagship agriculture initiative, the Anchor Borrowers Programme (ABP), to provide access to credit to over four million Smallholder Farmers (SHFs) in 36 states of Nigeria and the FCT.

“Farmers were required to open bank accounts to access this facility.

“This marked the first time many of them had accounts, and has consequently led to the growth of financial inclusion among this underserved segment.”

Besides, the government launched the Micro Pension Policy 2019, which is aimed at deepening pension penetration among Micro, Small and Medium Enterprises (MSMEs) and the informal economy, said he.

Buhari further disclosed “we also initiated policies for Micro-Insurance and Collective Investment, geared toward providing access to a wide range of financial products and services to the underserved in line with our National Financial Inclusion objective.”

He, therefore, commended the National Financial Inclusion Steering Committee, chaired by Mr. Godwin Emefiele, Governor of CBN, as well as organisers of the conference for the initiative.

In his speech earlier, Emefiele had said the global meltdown of 2008 made financial services regulators to focus on improving financial systems stability and mitigating risks that could lead to future recurrence.

The CBN Chief stated: “Nigeria implemented a prudential regime to respond to the meltdown.

“While this effort improved financial system stability, it inadvertently undermined access to finance as entry barriers to the financial system became a disincentive for many economical active Nigerians.”

He, however, added that the response to the global event in 2008 was not entirely responsible for the underserved in Nigeria.

Impact of stakeholders’ initiatives on access to financial services, by CBN Governor

Emefiele noted: “Infrastructure deficit like low Broadband penetration, lack of a functional national identity system, and high cost of delivering financial services through bank branches contributed to Nigeria’s financial exclusion situation.”

According to him, stakeholders’ initiatives have greatly improved financial inclusion in the country.

The CBN Governor stated: “As of 2008, 52.2 percent of Nigerian adults were financially excluded.

“This implied that one out of every two adults had no access to financial services.

“Even though Nigeria had a sizeable number of banked population, our financial inclusion rate was one of the lowest in the sub-region.”

He as well said: “Consequently, stakeholders undertook the onerous task of driving access to finance for the benefit of the hitherto excluded segments through the National Financial Inclusion Strategy.

“As of the end-2020 the financial exclusion rate had reduced to 35.9 percent.

“While this remains high, it is a huge improvement.”

Digital transactions largely an urban phenomenon in Nigeria: UN Special Advocate

In her contribution, Queen Maxima, UN Secretary-General’s Special Advocate for Inclusive Finance for Development, said a World Bank survey indicated a five percent growth in financial inclusion between 2017 and 2021.

Maxima disclosed the new bank accounts and digital transactions in Nigeria were largely an urban phenomenon.

She submitted “this event offers a better chance to achieve a common vision that every Nigerian, no matter their background, geography or gender can have access to quality financial services.”

Speaking at the forum, Mrs. Aisha Ahmad, Deputy Governor, Financial System Stability at CBN, said some of the biggest impacts on technology had occurred in the global payment and financial system.

Ahmad, who doubles as Chairman of the National Financial Inclusion Technical Committee, said mobile electronic banking had opened the vistas for financial inclusion.

The CBN Director said Nigeria had made commendable progress, in spite of obvious challenges.

She added: “We launched our target in 2012, aiming to ensure 80 percent of financial inclusion of Nigerians by 2022.

“We have made significant progress in this respect to improve financial inclusion to 64.1 percent from 53.7 percent when we started in 2012.”

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