By Amaka Abayomi
Governor, Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, has said empowering the 70 per cent of people living below the poverty line through financial inclusion would boost economic growth and development.

Speaking at the 5th Annual Microfinance and Entrepreneurship Awards, Sanusi attributed the rise in poverty level  to the various challenges of financial inclusion, saying the inclusion of this per cent would improve economic growth.

“The number of people living below the poverty line is 70 per cent. In Nigeria, 46.3 per cent of the population are financially excluded and this is primarily because of the low bank penetration.

“For instance, the 24 commercial banks have 5,789 branches as at September 2010. When you add the 816 microfinance banks to this number, you have 6,605 bank branches.

“But with a population of over 150 million, you have a situation whereby 22,710 people are served by a branch, and there are higher the ratios in rural areas where there is absolute dearth of depositories.”

The CBN Governor listed the challenges of financial inclusion to include sparse location of target groups, poor infrastructure, and difficult physical access, lack of awareness, low income and social exclusion.

Others are illiteracy, distance from banks branch, cumbersome documentation procedure, unsuitable products, high transaction costs, difficulty in proving identity and easy accessibility of informal credit.

Emphasising the need to empower this group, the CBN Governor said the trickle down effects of financial exclusion is slow and may take longer than anticipated.

“Empowering this segment of the population is a sine qua non to a robust and inclusive economic growth and development. This is because it is more distressing to believe that this wide divergence will narrow anytime soon without more intensive efforts.

“There is increasing need to devise more appropriate mechanisms to deliver these services at affordable cost and the CBN have consistently taken steps to improve access to financial services as well as maintain stability in the financial system.”

The Annual Microfinance and Entrepreneurship Awards is organised by the CBN and this year’s edition, themed Financial Inclusion for Accelerated Micro, Small and Medium Enterprises Development: The Nigerian Perspective, featured the presentation of awards to states and individuals and the display of products by some SMEs.