Nigeria:CBN Releases New Guidelines for Financial Inclusion Implementation

DEC 30,2013.

THISDAY.

The Central Bank of Nigeria (CBN) has released new guidelines for the swift take off of the next level of implementation of the Nigerian Financial Inclusion Strategy (NFIS).

The new guidelines released at the weekend include promoting increased awareness of its financial inclusion strategy, setting up of a financial inclusion secretariat, and the establishment of a financial inclusion committee, as well as development and running of pilot schemes.

The CBN said it was working with other stakeholders to implement a NFIS that would reduce the percentage of adult Nigerians that are excluded from financial services from 46.3 per cent in 2010 to 20 per cent by 2020.

The CBN stated in the guidelines that specific targets had been set for payments, savings, credit, insurance, pensions, DMB and MFB branches, ATMs, POS, banking agents, youth and women.

The guidelines also stated that a variety of stakeholders had been identified to support the implementation of the strategy and their roles and responsibilities had been defined.

The strategy document indicated that the number of Nigerians included in the formal sector would increase from 36.3 per cent in 2010 to 70 per cent by 2020, a goal which the apex bank stated will be pursued through a broad range of coordinated interventions, with high priority on the following:

(I) Transformation of existing Know Your Customer (KYC) regulations into a simplified risk based tiered framework that allows individuals who do not currently meet formal identification requirements to enter the banking system;
(II)
(III) Development and implementation of a Regulatory Framework for Agent Banking to enable financial institutions to bring banking services to the unbanked in all parts of the country; and
(IV)
(II) Development and implementation of a National Financial Literacy Framework to increase awareness and understanding of financial products and services, with the ultimate goal of increasing sustainable usage.

Other  areas to be addressed include the implementation of a comprehensive consumer protection framework to safeguard the interest of clients and sustain confidence in the financial sector; continued pursuance of Mobile Payment System and other cash-less policies to reduce the cost and increase the ease of financial services and transactions; and Implementation of Credit Enhancement Schemes/Programmes to empower micro, small, and medium enterprises (MSMEs):

The CBN's vision is that 60 per cent of the Micro, Small and Medium Enterprises Development Fund (MSMEDF), will support loans from microfinance banks and institutions to women and women-owned enterprises

Coming one year after the launch of financial inclusion in the country, the CBN also listed steps it would take to track and implement the strategy.

The tracking mechanism lists all programmes and initiatives that are to be implemented in the next review period and the actions that will be required to launch them successfully. It also provides a list of recommendations for improving underachieving KPIs and other indicators plus an outline of stakeholder responsibilities for each action.

The apex bank enjoined stakeholders to commit sufficiently to supporting the strategy, while it takes the lead role in coordinating and promoting the strategy in order to achieve its set goals and objectives.