Tag Archive

> Posted by Nadia van de Walle, Senior Africa Specialist, the Smart Campaign

A year ago, Nigeria put forward an ambitious financial inclusion strategy. This National Financial Inclusion Strategy (NFIS) is an exciting development, and with this post I want to take a closer look at it and spotlight some areas to watch as implementation progresses in the years to come.

So, what is it all about? In October 2012, President Goodluck Jonathan and the Central Bank of Nigeria (CBN) promoted the program as a key driver for achieving their larger Vision 20: 2020 strategy, an ambitious initiative aiming to make Nigeria one of the world’s 20 largest economies by 2020.

The CBN is already one of 36 national institutions that have signed the AFI Maya Declaration, a set of commitments from emerging economies’ governments’ designed to increase access to and lower the costs of financial services, and its governor often makes the case that financial inclusion benefits economic growth. After all, despite being West Africa’s largest economy and holding an impressive mass of natural resources, Nigeria is also home to 100 million people living on less than US$1.25 a day. In the financial sector, only 30 percent of adults have an account at a formal financial institution. Public sector borrowing crowds out private borrowers and lending institutions have become increasingly risk averse, reflecting recent crises and adjustments to new regulatory reform. Credit markets remain underdeveloped with limited products, short-term horizons, and high borrowing costs. Making the financial landscape even harsher, Nigerians must contend with inadequate physical infrastructure, ineffective legal institutions, and everyday challenges like distant bank branches, missing identification documents, and high fees.

Read the rest of this entry »