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Analyst Advises CBN on Measures to Deepen Financial Inclusion

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The Managing Director/Chief Executive, SD&D Capital Management Limited, Mr. Idakolo Gbolade, has urged the Central Bank of Nigeria (CBN) to register more cooperative societies with specific mandate to cater for the needs of the unbanked population in the country.

Speaking in an exclusive interview with THISDAY, he said though measures that had been so far deployed by the apex bank to deepen financial inclusion are novel ideas, cooperative societies are required to ensure that the unbanked population, most of whom are uneducated, have confidence in such technologies.

Gbolade said the government should have cooperatives bodies which are able to translate government policy on financial inclusion especially to those who can neither read nor write or who do not have mobile handsets – so that government’s programme can have effective outcomes.

He said the unbanked population are very important in driving financial inclusion, pointing out that deliberate policies were needed to attack that segment in order to produce an army of strong entrepreneurs to liberate the economy.
The major goal of the revised National Financial Inclusion Strategy (NFIS)
is to reduce the proportion of adult Nigerians that are financially excluded to 20 per cent by 2020 from its baseline figure of 46.3 per cent in 2010.

Idakolo said the CBN should have “an assemblages of cooperative societies and deliberately attack that area of unbanked segment”,adding that the “government has not done that so far”.

He said: “So, I believe that the CBN should have a look again into the unbanked population and have what I call a group of cooperative societies deliberately to be able to attend to specific areas of needs of this unbanked population in the agricultural sector, in the electronics and in all the sectors.”

He said: “That is why the cooperative societies need to come into play to a group of people that the people lack confidence in to be able to channel government’s policies to their understanding.

“What about those that do not have phones, and you say you must apply through your phone – some of them don’t have phones.
“So the government should be able to have cooperatives that can be able to translate government policy as regards financial inclusion to these people for their understanding.”

The MD added: “I am very passionate about the Nigerian economy especially the one that has to do with the lowest rung of the economy and we can call them the unbanked population.

“The CBN has to be more deliberate in the area of the unbanked population.”
“We should have cooperatives dedicated to those areas that can stand as a governing body to this unbanked population and to be able to disseminate information and resources to that area so that area too can be lifted because they have been neglected for too long.”

The CBN adopted the NFIS in 2012. The strategy articulated the demand-side, supply-side and regulatory barriers to financial inclusion, identified areas of focus, set targets, determined key performance indicators (KPIs) and established the implementation structure. The NFIS was built on four strategic areas of agency banking, mobile banking/mobile payments, linkage models and client empowerment. Four priority areas were identified for guideline and framework development namely, Tiered Know-your-Customer (T-KYC) regulations, Agent Banking regulations, National Financial Literacy Strategy and Consumer Protection.

The Strategy defined a set of targets for products, channels and enablers of financial inclusion. The KPIs were defined, based on the various dimensions of financial inclusion, including access, usage, affordability, appropriateness, financial literacy, consumer protection and gender. The NFIS proposed strategies for each of these elements, which included a comprehensive set of policy and regulatory changes as well as suggested business models. In the implementation of the Strategy, the targets were further tailored to reflect the needs and challenges of individual financial service providers (FSPs).

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