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By NBF News
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Minister of Finance, Dr. Ngozi Okonjo-Iweala and Governor, Central Bank of Nigeria, Mallam Lamido Sanusi

The Federal Government is set to launch a N220bn fund to enable Nigerian businesses and citizens that lack access to traditional financial services access such services at a much lower cost.

The Governor, Central Bank of Nigeria, Mr. Lamido Sanusi, said this at a press conference on the National Financial Inclusion Strategy in Abuja on Wednesday.

Similarly, plans have reached advance stages to roll out a micro-insurance framework aimed at encouraging rural dwellers and the urban poor to buy insurance policies that can boost their financial earnings.

At the conference, which was also addressed by the United Nations Secretary-General's Special Advocate for Inclusive Finance for Development, Maxima of the Netherlands, Sanusi said the fund would be launched before the end of the year.

The CBN governor said 60 per cent of the fund would be devoted to businesses managed by women at reduced interest rates.

Sanusi said several Nigerians were excluded from the financial market as a result of where they lived, while others were excluded because of their income level; yet, others were excluded because of their gender; adding that the fund would accommodate these categories of Nigerians.

Maxima said the financial sector would only contribute to Nigeria's equitable economic growth when it engaged all the population and enterprise activities.

According to her, the financial inclusion strategy begins with convenient, affordable and reliable ways to make payments.

She said, 'An efficient payment system is the backbone for many other services. And, then, savings accounts. All of these make such a difference for families, livelihoods and welfare.

'Meeting the strategy's goals will require diverse financial products tailored for different clients in different contexts. And because we want diverse products, we will then most likely have diverse providers and means of delivery.'

Maxima added, 'Merchants from Abuja to Zaria will all benefit from affordable quick ways to receive and make payments, while a small factory owner will benefit from lines of credit during peak production and long-term financing to acquire faster machines.

'The only way Nigeria can do this is to harness new channels. In particular, mobile money can play a very big role. There are already four times as many mobile phone towers as there are bank branches in Nigeria.'

In a related development, the Commissioner for Insurance and Chief Executive Officer, National Insurance Commission, Mr. Fola Daniel, has said that the regulatory agency has reached final stages for a reliable micro-insurance framework to cater for those that have been excluded from insurance services.

Daniel, who spoke at a workshop for stakeholders on micro-finance, said the rules in the framework were flexible and designed in such a way that insurance providers had the freedom to use new and innovative procedures to reach the poor.

He said, 'We have, indeed, taken due cognisance of the challenges the development of micro-finance will face in Nigeria. This point cannot be overemphasised considering the fact that microfinance cannot easily be sold using the conventional intermediaries - brokers and agents.

'While the commission is considering several approaches available to it, we are of the belief that the partner-agent model could be best suited for the Nigerian market. This approach comes with less stringent requirement for capacity.

'It is expected that the insurance industry will leverage and key into this sector by developing the needed micro-insurance and services tailored to support, protect and assist the low income populace to alleviate poverty.'