CBN issues new guidelines for financial inclusion strategy

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

The NFIS is part of the CBN's efforts to 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 new guidelines outlined by the financial sector regulator  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.

Part of the financial sector regulator's strategy as outlined under the new guidelines include setting specific targets had been set for payments, savings, credit, insurance, pensions, DMB and MFB branches, ATMs, POS, banking agents, youth and women.

Variety of stakeholders had been identified to support the implementation of the strategy and their roles and responsibilities had been defined.

According to the CBN  strategy document, the number of Nigerians included in the formal sector would increase from 36.3 per cent in 2010 to 70 per cent by 2020.

The apex bank hopes to pursue this goal 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):

By CBN's calculation, about  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

To ensure effective implementation of the strategy, the CBN says it will employ the following measures: put in place a tracking mechanism that 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;

Provide a list of recommendations for improving underachieving KPIs and other indicators plus an outline of stakeholder responsibilities for each action.