Dr. Nurudeen Abubakar Zauro is the Technical Adviser to the President on Economic and Financial Inclusion. In this interview, he speaks on how financial exclusion is hindering economic growth, and perpetuating poverty and inequality.

The presidential adviser also shares measures including policies and programs being put in place by President Bola Tinubu’s administration to ensure that all Nigerians are captured into the economic and financial system. Excerpts:  

What inspired the President’s commitment to financial inclusion, and how does it align with his overall economic agenda?

President Tinubu’s commitment to financial inclusion is a bold and ambitious goal and it is driven by several factors. Firstly, he recognizes that a significant portion of the Nigerian population remains unbanked or underbanked, limiting their access to formal financial services. This exclusion from the formal financial system perpetuates poverty and inequality and hinders economic growth. Secondly, the President understands that financial inclusion is crucial for promoting economic development, you know, access to financial services enables individuals and businesses to save, invest, and grow their wealth. It also facilitates the flow of credit, which is essential for businesses to expand and create jobs. The President believes that financial inclusion is a matter of social justice in which everyone should have equal opportunities to participate in the economy and benefit from financial services, regardless of their income, location, or gender. 

 So the President’s commitment is closely aligned with his overall economic agenda because it directly impacts the six points among the eight points of the agenda. We are talking about access to capital, inclusivity, ending poverty, and a couple of them including the health component. Remember, we are not only talking about financial inclusion but economic financial inclusion. So Mr. President envisions a Nigeria where every citizen has the opportunity to contribute to and benefit from the economy. Again, by promoting financial inclusion, the President aims to increase economic growth, reduce poverty and inequality, promote social stability, and empower women.

So there’s a nexus between financial inclusion and economic growth. When people are saving, investing, and so on, it increases productivity and creates jobs for the country. It reduces poverty by providing individuals and businesses access to capital and what they need to improve their livelihood and of course, continue to engage in economic activities. So, financial inclusion is seen as a key pillar in achieving this vision.

Can you share specific initiatives or programs the administration has to expand financial services to underserved populations?

Here we have and want to leverage a lot of initiatives to ensure digital financial services. There are so many initiatives in which the government is collaborating with the stakeholders and the private sector. The likes of fintech associates have over 500 members who are all agencies, or organisations, into doing one or two things, some of them identities, some are into delivering financial services, while some others are into agric and health sectors and so on. 

A lot of conversations are going on. In terms of specific initiatives, yes we have a couple of them for sure. But then, overall, there are quite a number we are rolling out depending on sectors. You know when you talk about economic and financial inclusion, apart from access to finance itself, then, having is one thing which is to open an account, access to insurance, pensions, credit payments, and savings, I think these are major components, right? 

So apart from having access, then usage of that account is also important but you can’t use the account if you don’t have you don’t have money or income to engage in any economic activity. You will simply be exacerbating your problem. It is because of that that this economic and financial inclusion has become important. Therefore, this administration is collaborating with telecommunications providers and financial institutions to augment access to digital financial services. This will include initiatives to diminish the cost of mobile data and to augment the number of mobile money agents in underserved areas. As I speak to you, policies that promote the safe and secure use of digital financial services are being developed. The government is partnering with financial institutions to develop products and services tailored to the needs of underserved populations. 

This will include products such as micro-savings accounts, micro-loans, and mobile banking services. We are also doing our best to reduce the regulatory burden on financial institutions that serve underserved populations. 

Again, you cannot talk about financial inclusion without financial literacy. So, the administration is investing in financial literacy and education programs to assist underserved populations in comprehending and utilizing financial services through schools, community organizations, and the media. We will gather data on the financial inclusion status of underserved populations to track progress and identify areas where additional efforts are necessary.

This data will be utilized to inform policy decisions and to ensure that financial inclusion initiatives are efficacious. We will also collaborate with relevant agencies and stakeholders to review and revise regulations to reduce barriers to financial inclusion, such as excessive fees and complex application processes. This is to implement policies that promote transparency and fairness in the financial services industry and protect consumers from predatory practices. Our goal is to encourage financial institutions to adopt responsible lending practices and to avoid targeting underserved communities with high-cost loans. By implementing these initiatives and programs, the administration aims to bridge the financial services gap and empower underserved populations with the tools and resources they need to achieve economic stability and financial well-being.

Is financial inclusion the same as making money/capital available to the underserved?

Not really. The concept of financial inclusion encompasses more than just the provision of money or capital to include access to a range of financial services such as savings accounts, credit cards, and insurance. These services can help people manage their finances, build assets, and improve their quality of life. In addition to access to financial services, financial inclusion also includes the ability to use those services effectively. This means having the knowledge and skills to make informed financial decisions and having the confidence to interact with financial institutions and seek out financial advice. Financial inclusion is important for several reasons. It can help people achieve their financial goals, such as buying a home, starting a business, or saving for retirement, thereby reducing poverty and inequality, promoting economic growth, and creating a more stable financial system.

How does the government plan to address the challenges of financial exclusion, particularly in rural areas?

 

Financial exclusion is a significant issue, especially in rural areas where access to formal financial services can be limited. There are several barriers to financial inclusion, such as a lack of access to financial services, a lack of financial literacy, and a lack of trust in financial institutions. To address these barriers, governments, financial institutions, and community organizations are working together to promote financial inclusion. Some specific initiatives being undertaken to promote financial inclusion include expanding access to financial services, providing financial education, and advocating for policies that promote financial inclusion.

We have developed and implemented national financial inclusion strategies that outline clear goals, targets, and timelines for increasing access to financial services.  Aside from establishing regulatory frameworks that encourage financial institutions to expand their reach into rural areas, we are investing in infrastructure, such as roads, bridges, and telecommunications networks, to improve connectivity and facilitate the delivery of financial services. We are also supporting the establishment of financial access points, such as community banks, credit unions, and mobile money agents, in rural areas. 

There are ongoing efforts to promote the use of digital financial services, such as mobile money and electronic payments, as they offer convenience and accessibility for individuals in rural areas. 

So we are collaborating with schools, community organizations, and financial institutions to deliver financial literacy workshops and training.

How does the government plan to address issues of financial literacy and education among Nigerians?

President Tinubu recognizes the critical need to address issues of financial literacy and education and has taken several steps to promote financial inclusion and empower Nigerians with the knowledge and skills to make informed financial decisions. One of the measures the government has taken was to develop a comprehensive National Financial Literacy Strategy, NFLS, in collaboration with relevant stakeholders. In 2018, the CBN launched the NFLS as a comprehensive roadmap for achieving financial inclusion in Nigeria.

It sets out several targets, including increasing the percentage of Nigerians with access to financial services from 40% to 80% by 2020. The NFLS aims to enhance financial literacy across all segments of the population, with a focus on vulnerable groups, women, and youth. It promotes financial education through various channels, including schools, workplaces, community programs, and the media.

The CBN has also introduced many initiatives to support financial inclusion, such as the Shared Agent Network Expansion Facility (SANEF). SANEF is a N500 billion fund that is being used to support the deployment of 500,000 agent networks across the country.  

This will make it easier for people in rural areas to access financial services. In 2019, the CBN launched the Financial Literacy Framework for Nigeria. This framework would improve financial literacy among  Nigerians, such as developing financial literacy curricula for schools and universities and working with the media to raise awareness of financial literacy issues. Moreso, the government hopes to drive integrated financial literacy into the national education curriculum at primary, secondary, and tertiary levels.

This  ensures that students receive financial education as part of their regular academic studies, equipping them with essential skills from an early age. Again, the government, in partnership with financial institutions and development organizations, conducts nationwide financial education campaigns. These campaigns utilize various platforms, such as radio, television, print media, and social media, to reach a broad audience to raise awareness about financial management, budgeting, saving, and responsible borrowing.

How will the government balance the need for financial inclusion with concerns about financial stability and risk management?

The Nigerian government faces a delicate balancing act in addressing the need for financial inclusion, while also managing concerns surrounding financial stability and risk management. However, the government has established a robust regulatory framework that addresses the unique risks and opportunities associated with financial inclusion. It is already implementing policies that encourage financial institutions to adopt responsible lending practices and ensure consumer protection. We are developing a national digital identity system to facilitate seamless access to financial services and reduce the risk of fraud. Already,  there’s a financial literacy program in place to educate the public, especially vulnerable populations, about the benefits and risks of financial products and services.

What message would you like to convey to Nigerians about the administration’s commitment to financial inclusion?

This administration is committed to ensuring that all  Nigerians have access to financial services, regardless of their income, location, or gender. We believe that this is essential for reducing poverty, boosting economic growth, and improving the lives of all Nigerians.

To achieve this, we are working on a number of initiatives, including expanding access to financial services in rural areas, promoting financial literacy, encouraging the development of innovative financial products and services, and strengthening the financial regulatory framework. We are committed to working with all stakeholders to achieve our goal of financial inclusion for all Nigerians.

We believe that this is an essential step towards building a more prosperous and equitable future for our country. The administration is committed to working with all stakeholders to achieve our goal of financial inclusion for all Nigerians. We believe that this is an essential step towards building a more prosperous and equitable future for our country.