CBN to reduce unbanked population by 20 per cent before 2020

The Central Bank of Nigeria has expressed commitment in reducing the number of unbanked population drastically in the coming years in its renewed financial inclusion policy drive.

The Director, Banking and Payments System Department, CBN, Mr. Dipo Fatokun, said that the apex bank would reduce the country's unbanked population by 20 per cent before year 2020, adding that the country's unbanked population currently stands at 46.3 per cent.

He stated this while presenting a paper titled: 'Mobile Money in Nigeria: Prospects, Opportunities and Challenges' at the Institute of Chartered Accountant of Nigeria, Ikeja District society meeting in Lagos.

He said CBN would work to ensure success of the strategy.

He recalled that a survey carried out in 2008 by an international agency, Enhancing Financial Innovation and Access on access to financial services in the Nigeria revealed that banking penetration was relatively low with only 21 per cent of adult population in the country having access to banking services, while 74 per cent had never been banked.

The remaining five per cent, previously banked, in other words, had left the banking system, Fatokun added.

Reasons adduced for lack of bank accounts by many were proximity to financial service outlets, product complexity and cost of service.

'The concerns for financial inclusion are valid as no nation can progress and develop if majority of its population is under banked or has no access to financial services. A good example is Kenya where it has been proved that a half percentage increase in their national Gross Domestic Product growth is attributable to mobile money transactions,' Fatokun said

He further said, 'Indian policy makers too, have embraced the importance of mobile money as the best solution for financial inclusion and economic growth. A study on the impact of financial access on poverty in the country carried by Economists, Robin Burgess and Rohini Pande estimated that one per cent increase in the number of rural locations banked, par capital reduced rural poverty by 0.42 per cent and increased economic productivity by 0.34 per cent.'

With the above scenario in mind, and to promote financial inclusion, he said the CBN had identified mobile telephony as one of the veritable channels through which the unbanked could be provided easy access to financial services at affordable cost.

'The need to create an enabling environment for all participants saw the development of the Mobile Payments Regulatory Framework in 2009, to guide the industry players. The overriding vision was to achieve a system that is nationally utilised and internationally recognised - a Nigerian system of mobile payments,' he added