Key Financial Inclusion Imperatives on the Road to 2020 (and 2024)

LBS Insight

Key Financial Inclusion Imperatives on the Road to 2020 (and 2024)

To mark his reappointment, the Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, shared his vision to have 95 percent of Nigerian adults financially included by 2024. This is interesting because there remains a yet-to-be-met target of 80 percent with a deadline of 2020 which Nigeria committed to under the Maya Declaration in 2011.

As ambitious as this new target is, it is not impossible. However, it does require a few imperatives which we believe should be prioritised. This article discusses some of them:


Diffusion of Digital Financial Services (DFS)

Deliberate efforts are required to empower more merchants with DFS capabilities thereby expanding the DFS-enabled merchant pool. If more merchants are able to receive digital payments, it increases the acceptability of DFS and more citizens are likely to adopt it. With more consumers using digital payments, money stays digital for longer and this keeps consumers within the formal financial service value chain.


Reducing the fees associated with owning or using formal financial services is necessary for increased adoption by the poor and vulnerable. One way this can be achieved is through policies and also implementation and monitoring mechanisms to ensure adherence by relevant ecosystem players. For example, in spite of a guideline on agent charges, agents still often charge above the recommended rates. We also need to examine factors influencing the cost to serve for agents.

Transitioning from Informal to Formal Systems

One thing to remember is, even though people are financially excluded, they are still transacting in their daily lives — they are paying for food, travel, sending money to loved ones etc. The only difference is that these transactions are mostly via cash and do not leave a footprint within the formal sector. The working theory is that if we can introduce formal solutions into these informal networks, it will create shared prosperity by lowering the barriers to access credit as well as introduce the excluded and underserved to new tools and relevant interventions.

SMEs and Access to Credit

There is an underlying belief that financial inclusion will improve the economic wellbeing of Nigerians. One clear path to this is seen in the MSME sector. If small scale entrepreneurs are formally served and have access to credit, they are able to ramp up their economic activity and also employ more people, which in turn has a ripple effect on the community. And because these entrepreneurs are formally included, progress is easier to monitor and track.

Distribution and convenience

Limited presence of financial institutions (particularly banks) in several regions of Nigeria, especially the Northern geopolitical zones, is one of the major inhibitors to financial inclusion. Strong agent networks are required to ensure financial services are accessible by every citizen, regardless of where they live. Hence the emergence of agent network initiatives and super agents in recent years. However, agent network growth and viability has been limited in many regions given several infrastructural lags which exist in the country. In particular, mobile network connectivity and electricity supply are inadequate in several regions of the country. These two critical elements are the rails upon which digital financial services run, and without them, furthering financial inclusion in those s regions will be impossible. Intervention funds may also be necessary.


Nigeria’s financial inclusion journey has been an arduous one. And with the looming 80 percent by 2020 deadline (and not forgetting the new 95 percent by 2024 one), the stakes may have been raised higher. However, we strongly believe the targets are attainable if we prioritise the right problems in order to solve them as well as introduce the appropriate interventions in strategic ways.

What other inhibitors do you think the ecosystem should prioritise solving?

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