By NKIRUKA NNOROM
The shallowness of the domestic financial system remains a key downside to financing the nation’s economic development needs, Group Managing Director, First Bank of Nigeria (FBN) Plc, Mr. Bisi Onasanya, has said.

Making the remark in his presentation at the recently concluded second edition of the Free Trade Zone (FTZ) conference entitled, “FTZ: Sustaining Future Growth,” he observed that this was especially so for specialised financing solution, including Free Trade Zones.

He lamented that this was despite the Draft MSME Strategy that projects that by “2020, the Nigerian credit-to-GDP ratio will be among the top three emerging markets, including access to credit for the productive SME sub-sector and 70 per cent of the Nigerian population.

He said: “Despite banks’ significant expansion of credit to the domestic economy in recent years, most local economic entities still lack access to formal financial services. Less than one per cent of Nigerian businesses ever had access to bank finance. There is serious need for growth in real sector lending.”

Stressing on some of the challenges that mar accessibility to banks’ loans, Onasanya stated that there was need to improve the reliability of market information, strengthen cross-sector capacity, as well as building financial services infrastructure. He added that there was also need to promote regulatory coordination among all the policy makers in the financial circle.

He remarked, however, that given the recent financial sector reforms and ongoing innovations in the private sector, there are signs of growth in access to finance in Nigeria.

“Alive to its responsibility for driving economic growth and development, the federal government, in 2004, developed a poverty reduction strategy paper – NEEDS.

“The Financial System Strategy 2020 (“FSS 2020”), a comprehensive long-term strategic plan for its development was developed in 2007 to build on the gains of successive banking sector reforms to promote greater stability, depth and diversity of the entire financial system.

Compound annual growth rate of 6 per cent with a relatively steady increase in the non-oil contribution to the nation’s GDP in recent times (due to the reform effort) have re-invigorated private sector participation in the economy,” the First bank boss emphasized.