Financial inclusion may worsen next decade –Report
Compared to Nigeria’s ambitious targets, national financial inclusion outcomes are weak by every measure and may worsen in the next decade.
The Bill and Melinda Gates Foundation stated this in a report titled ‘Nigerian payments ecosystem and financial inclusion: Landscape report’.
According to the study, despite lofty national goals, a large pro-tech economy and decades of work on inclusion, the Nigerian payments ecosystem is not supportive of financial inclusion outcomes and may worsen in years to come if efforts continue at the current pace.
It noted that the measures of financial inclusion had failed to meet national targets and was worse for vulnerable groups including the poor, women, and rural Nigerians, adding that it showed no sign of organic improvement.
The report stated, “Although a mature retail payments infrastructure is in place, we don’t see this infrastructure scaling to serve the poor.
“We see minimal increase in access to transaction accounts, limited use of those accounts, and few people using a diversified suite of financial products.
“In the face of global contractions and humanitarian crises presented by COVID-19, status quo policies and products may be rendered even less capable of pulling the excluded into the financial mainstream.”
It added that enabling infrastructure, including ID and ICT, were underdeveloped and lacked penetration, blaming the lack of empowered leadership and harmonisation across agencies and sectors.
The report also pointed out that though retail payments infrastructure was largely supportive of financial inclusion outcomes, enabling infrastructure and distribution channels were not supportive.
Also, product and innovation ecosystem, as well as ecosystem dynamics were not supportive of expected financial inclusion outcomes.
It added that policy vision was supportive of financial inclusion; however, regulation implementation was unsupportive of financial inclusion outcomes.
According to the study, without positive interventions, financial inclusion outcomes will worsen, considering limited upward progress against inclusion goals in the past decade and indications of increasing population without meaningful or equitable economic gains.