By Babajide Komolafe & Ahmed Ibrahim

Nigeria should look beyond micro-finance institutions to achieve the goal of  financial inclusion and poverty reduction says Mr. Laoye Jaiyeola,   immediate past president, Chartered Institute of Bankers of Nigeria (CIBN).

“To facilitate inclusion, we may however have to look beyond microfinance, as studies in other countries have shown, microfinance can help the unbanked have access to credit but it has been discovered that the monies made available to them are merely  for sustenance and may not necessarily have an effect on bringing them out of the shackles of poverty”, he said on Friday.

In a valedictory speech delivered at the 2012 Presidential Address of the Institute, which also   marked the end of his tenure as the President of the Institute, Jaiyeola said that that the existing banking practice in the country doesn’t encourage financial inclusion, adding that that is why despite all the reforms in the banking industry, banking services have remained  limited to few people in the country.

He said, “Let us be clear, the kind of lending into which we have descended, or is it forced, is unlikely to create the kind of inclusiveness that we seek. The few who are rich will get wealthier whilst the overwhelming majority of our fellow countrymen and women will, as data from the National Bureau of Statistics shows, continue to wallow in poverty.  This  can only be a prescription for divisiveness and erosion of our national integrity.”

“Available data shows that in 2010, the aggregate value-added of banks amounted to 1.21 per cent of total value, or Gross Domestic Product, created in the economy. In contrast, the value-added created by the 20 most capitalised non-finance companies listed on the Nigerian Stock Exchange amounted to 1.86 per cent of GDP in 2010. If the ‘real sector’ firms are creating greater wealth than banks, how do we justify the sharply higher difference in remuneration for staff and management of banks?