By Laja Thomas
THE Central Bank of Nigeria, CBN, has restated its commitment to reducing the country’s unbanked population by 20 per cent before year 2020. The move is part of the apex bank’s financial inclusion strategy aimed at ensuring greater participation in the nation’s financial sector.
Director, Banking and Payments System Department, CBN, Mr. Dipo Fatokun stated this while speaking at a members’ meeting of the Ikeja District Society of the Institute of Chartered Accountants of Nigeria, ICAN, in Lagos.
In his presentation, entitled: “Mobile Money in Nigeria: Prospects, Opportunities and Challenges,” Fatokun said surveys conducted on financial services in Nigeria revealed that banking penetration was relatively low because of a number of factors, some of which include proximity to financial service outlets, product complexity and cost of service.
He noted that no nation could progress or truly develop if majority of its population are under-banked or has no access to financial services.
To this end, Fatokun said the CBN was vigorously working to ensure the success of the mobile money initiative as a financial inclusion strategy to reduce the nation’s unbanked population by 20 per cent.
He said: “The percentage figure of Nigeria’s unbanked population currently stands at 46.3 per cent and the CBN will work to ensure the success of the strategy.”
According to Fatokun, a survey carried out in 2008 by an international agency, Enhancing Financial Innovation and Access, EFInA, on access to financial services in the Nigeria revealed that banking penetration was relatively low with only 21 per cent of adult population in the country having access to banking services, while 74 per cent had never been banked.
The remaining five percent, previously banked, in other words, had left the banking system, Fatokun added.
He said: “The concerns for financial inclusion are valid as no nation can progress and develop if majority of its population is under banked or has no access to financial services. A good example is Kenya where it has been proved that a half percentage increase in their national Gross Domestic Product growth is attributable to mobile money transactions.
“Indian policy makers too, have embraced the importance of mobile money as the best solution for financial inclusion and economic growth.
“A study on the impact of financial access on poverty in the country carried out by Economists, Robin Burgess and Rohini Pande estimated that one per cent increase in the number of rural locations banked; per capital reduced rural poverty by 0.42 per cent and increased economic productivity by 0.34 per cent.”
With the above scenario in mind, and to promote financial inclusion, Fatokun said the CBN identified mobile telephony as one of the veritable channels through which the unbanked can be provided easy access to financial services at affordable cost.
He pointed out that the need to create an enabling environment for all participants was what saw the development of the Mobile Payments Regulatory Framework in 2009, to guide industry players.
According to the apex bank director, the overriding vision was to achieve a system that is nationally utilised and internationally recognised Nigerian system of mobile payments.
Highlighting the opportunities available in mobile money, the CBN Director said it would help in creating employment opportunities, enhance national economic growth, engender efficiency in monetary policy management and the payments system.
He listed other benefits to include safe and convenient method for urban workers to send money to families in rural areas; and faster, convenient and safer way of being paid, among others.