ENHANCING NIGERIAN ECONOMIC GROWTH THROUGH INTEGRATIVE FINANCIAL INCLUSION STRATEGY
Authors:
Dr Amieyeofori Valentine Felix (PhD)
Abstract:
This paper investigated how to fully integrate the unbanked adult population in Nigeria into the formal financial sector as a means of boosting the economy. To achieve this objective, the paper reviewed both theoretical and empirical literature on financial exclusion, financial inclusion, including Nigeria’s historical and the 2012 National Financial Inclusion Strategies, and the successful financial inclusion models of some selected countries. The 2012 strategy, amongst others, set a target of achieving 20% financial exclusion by 2020. However, despite Nigeria’s several attempts at financial inclusion since 1976, with such programmes as the rural bank, people’s bank, community bank, agricultural credit schemes, and the recent 2012 financial inclusion strategy, the country still lagged behind some of its sub-Saharan counterparts in financial inclusion. This paper found that women are more financially excluded than men, while the North due to its high poverty and illiteracy level, coupled with its predominant Islamic practice is also more financially excluded than the South. The country’s poor performance can be attributed primarily to its initial concept of financial inclusion which was more of public social service as opposed to engaging the full participation of the private sector to make it an all-inclusive economic venture. The financial inclusion strategies also failed to provide financial products that target the poor and illiterate population, women and rural dwellers, on the one part, and specific products that will appeal to the Muslim population that practice Islamic faith in the North. Lack of basic infrastructure to support the inclusion projects for mobile money operators, and other branchless financial products, and the country’s delay in adopting the Shared Agent Network banking, and other digital financial products, like its peers in sub-Saharan African countries, were part of the drawbacks on the financial inclusion projects. To move forward, Nigeria must-see financial inclusion as an economic growth venture, engage the private sectors with the right incentives, develop specific financial inclusion products that will woo the poor and illiterate population, and women especially those in the North. CBN should also consider more Islamic banking products, and develop financial products in the indigenous languages. Given the strides achieved by peer countries, the country should also consider the successful models of Kenya, Rwanda, and China, and digitization of all the payments in its agricultural credit schemes since agriculture has the highest employment in the country.