In the dynamic landscape of Nigeria's
financial sector, the clarion call for financial inclusion resonates as a key
driver of sustainable economic growth. Financial inclusion which has to do with
accessibility and availability of financial services for all irrespective of
income levels, holds the potential to revolutionize the economic fortunes of
individuals and the nation at large.
As Nigeria strives for economic
diversification and increased global competitiveness, the importance of
integrating all citizens into the formal financial system cannot be overemphasized.
The World Bank Group considers financial inclusion “a key enabler to reduce
extreme poverty and boost shared prosperity.”
One of the important benefits of
financial inclusion is the empowerment of marginalized communities. Providing access to basic financial services
such as digital wallets, Point-of-Sale (POS) solutions and microcredit to individuals
in rural and underserved areas, can break the shackles of poverty.
This empowerment is a catalyst for
entrepreneurship, thereby fostering the growth of micro, small and medium-sized
enterprises (MSMEs) that are pivotal to the nation's economic fabric. As more
Nigerians gain access to financial resources, a national entrepreneurial spirit
is kindled, leading to job creation and a more resilient and diversified
economy.
In June this year, the Central Bank
of Nigeria said it had achieved 64.1 per cent financial inclusion. This was
made known by the Assistant Director, of Financial Development, of the Central
Bank of Nigeria, Paul Oluikpe. He also said the Apex Bank was targeting 95 per
cent inclusion by 2024.
Initially, the CBN launched the
National Financial Inclusion Strategy in 2012 with the aim to reduce financial
exclusion to just 20 per cent of the adult population by 2020. This meant a
target of 80 per cent inclusion. Unfortunately, Nigeria is yet to achieve that
feat.
Recognising the need and opportunity
for advancing financial inclusion in Nigeria through digital finance, in 2018,
the Central Bank of Nigeria (CBN) introduced a new type of banking license, –
Payment Service Banks (PSBs). With PSBs, the CBN aims to leverage the strengths
of businesses such as mobile network operators while maintaining a bank-led
rather than a telecoms-led banking model. This move is a testament to the
relentless commitment of the regulator in driving financial inclusion.
The PSBs and Agency Banking outfits
have a major role to play in penetrating rural locations to drive adoption of
banking services among the underserved and unbanked especially the MSMEs.
The role of these MSMEs cannot be
over emphasized. According to a report by National Information Technology
Development Agency (NITDA), it states that MSMEs contribute about 43% to the
national GDP and it is expected to grow by 26% if their services are digitized,
thereby contributing about $53bn to the nation’s economy. It is critical for
these economy drivers to be empowered to scale. It is important for their
transactions and businesses to be captured within the formal economy and these
can be achieved through digitization and continuous innovation.
My experience working with a
technology and digital payment solutions company has shown that the increased
adoption of innovative solutions such as Buy Now Pay Later (BNPL) services,
digital wallets and Point-of-Sale (POS) solutions are necessary to deepen
financial inclusion in the country and even across the continent.
Innovations such as Buy Now Pay Later
(BNPL) services, digital wallets and Point-of-Sale (POS) solutions will avail entrepreneurs
opportunities to expand their customer base, reach new markets, and participate
more actively in the formal economy, contributing to job creation and economic
growth.
Empowering entrepreneurs through
cutting-edge solutions as these will open new avenues for expanding customer
outreach, tapping into fresh markets, and fostering active participation in the
formal economy. This dynamic integration not only fuels job creation but also
propels economic growth, reinforcing a future where innovation becomes the
cornerstone of sustainable progress.
At Interswitch, where I have plied my
trade as an enterprise growth marketing professional for three years, our
commitment to digital payment solutions is a pivotal step towards fostering
financial inclusion and unlocking opportunities for every citizen. By
harnessing the transformative power of digital transactions, we aim to bridge
economic gaps, empower the unbanked, and catalyze sustainable growth. Through
our innovative approach, we envision a financially inclusive continent where
digital payments serve as a catalyst for prosperity, creating a more accessible
and equitable financial landscape for all.
Furthermore, as Nigeria positions
itself as a regional economic powerhouse, the importance of an inclusive
financial system cannot be overstated in attracting foreign investment. A
robust and inclusive financial sector signals to global investors that Nigeria
is committed to creating an environment conducive for economic growth.
The importance of financial inclusion
in driving the growth of Nigeria's financial industry is not just a matter of
economic policy but a bedrock for sustainable development. As the nation
strives for economic prosperity, ensuring that every citizen has access to and
can participate in the formal financial system is critical.
However, to achieve the desired
outcomes of a more inclusive Nigeria, payment industry players will do well to
channel measured and deliberate efforts towards improving digital financial
literacy regionally, upgrading digital infrastructure, deploying digital
solutions based on relevant use case, and working closely with regulators to
create policies that provides an enabling environment for digital payments to
thrive pan-Nigeria.
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