Financial Inclusion And Economic Resilience

The demand for financial inclusion in Nigeria has remained strident even as the authorities roll out policies and instruments designed to ensure consumers of financial products, across the spectrum, are carried along for the ultimate benefit of the economy.

In Mexico, in the city of Riviera Maya, in September 2011, the Third Alliance for Financial Inclusion (AFI), the international community put together the famous Maya Declaration.

It was the first deliberate effort by regulators in developing countries to establish a global, measurable set of commitments to reduce poverty through increased financial access.

The goal was to empower individuals, especially the poor, through financial inclusion, while enhancing national financial stability. And this has thus far achieved several set targets overwhelmingly as of 2025 in several countries, including Nigeria.

The declaration caught the World Bank’s attention. That Bretton Woods institution endorsed the initiative and redefined financial inclusion to mean “individuals and businesses have access to useful and affordable financial products and services—transactions, payments, savings, credit, and insurance—that meet their needs and are delivered in a responsible and sustainable way.” It also described it as a key enabler for reducing poverty and boosting prosperity.

The World Bank went a step further by establishing key performance indicators (KPIs) to assess the state of financial inclusion through the Global Findex Database. This was being done by measuring access to and usage of financial services across three key dimensions, namely availability, usage, and quality, to boost development and poverty reduction.

A much-needed Strategic Support was also delivered through initiatives such as the Financial Inclusion Support Framework (FISF), which provides technical assistance, data, and funding to help countries build inclusive financial systems. The results indicate that Global account ownership has grown from 55 per cent in 2014 to over 70 per cent in 2021.

On its part, Nigeria’s apex bank defines financial inclusion as the state in which adult Nigerians have easy access to a broad range of formal financial services that meet their needs at affordable costs. This includes access to payments, savings, credit, insurance, and pensions for all income segments.

It joined the global network of policymakers to commit to and sign the” Maya Declaration” in 2010, to reduce financial exclusion in Nigeria to 20 per cent by the year 2020. This commitment led to the National Financial Inclusion Strategy (NFIS) in 2012, with the aim of achieving 80 per cent adult financial inclusion by 2020.

The baseline for financial exclusion in 2012 stood at 46.3 per cent. At the point of NFIS conception, which was aimed at enhancing access to payments, savings, credit, insurance, and pensions, with a focus on narrowing gender and regional gaps. In addition, there was the promotion of agent banking, mobile money, and POS terminals to connect the unbanked, particularly in rural areas.

The baseline for Payments was 21.6 per cent, Savings (22.4 per cent), Credit (1.8 per cent), Insurance (1.0 per cent), and Pensions (5.0 per cent). In addition, actual Deposit Money Banks (DMB) branches by 2010 stood at (6.8 per 100k population), Micro Finance Bank (MFB) branches (2.9 per cent), Automated Teller Machines (ATMs) (11.8 per cent), Point of Sales (POS) Devices (13.3 per cent) and Mobile Agents (0.0).

Another novel strategy to drive financial inclusion is the digitalisation of the payment system. The bank drives financial inclusion through digital payments, encouraging the use of financial technology to enhance access. This has led to a 74 per cent inclusion rate as of 2024. It has continued to implement policies that support microfinance efficiency, consumer protection, and financial literacy, ensuring that financial services are affordable and accessible to more Nigerians.

The story of financial inclusion in Nigeria will be incomplete without the credible role played by Enhancing Financial Innovation and Access (EFInA) as a critical financial sector development partner.

Established in 2007 to promote pro-poor financial inclusion and drive systemic change through data-driven research, advocacy, and innovation funding, the aim was to increase access to financial services for underserved, unbanked, and low-income populations.

EFInA has been playing a critical role in Nigeria’s financial ecosystem, including through evidence-based research that serves as the primary source of data on financial inclusion in Nigeria. Another major initiative of EFInA is its Innovation Fund, which catalyses the development of new, accessible financial products and business models for the unbanked and under-banked. This is in addition to providing technical support for Policy Advocacy and Frameworks by collaborating with the CBN to implement the National Financial Inclusion Strategy and providing critical input on frameworks, especially regarding women’s financial inclusion.

Digital financial services (DFS) have evolved over the last two decades to provide easier access to financial services previously offered only to specific groups of individuals and businesses. By leveraging technology and data, digital finance ensures that a much larger proportion of Nigerians has easier access to a wider range of products and services, including credit options, investment opportunities, insurance, savings, and retirement plans.

The rapid growth of the digital financial ecosystem is enormous, as studies have shown that FinTech firms constitute over 50.0 per cent of financial services providers in the Nigerian financial system.

The quest for financial services driven by digital technology has continued to soar. Fintech has evolved into a transformative force, promoting financial inclusion by enhancing access, affordability, and financial literacy. The role of fintech in bridging financial gaps, particularly for underserved and rural populations, has demonstrated fintech’s capacity to lower barriers for disadvantaged groups, promote equitable economic participation, and support sustainable development goals.

The success story of financial inclusion in Nigeria cannot be adequately reviewed without highlighting the challenges that inhibit the desire to deepen financial inclusion.

Several studies have revealed the vulnerability of some critical segments of society in the financial inclusion drive, especially in developing countries like Nigeria, where poor people, children, women, youth and rural people are mostly exposed during financial, economic and environmental crises. They lack most of the basic buffers against shocks, such as savings, insurance, credit, and pensions; hence, they are overexposed to shocks from systemic turbulence.

In our opinion, the next step for financial inclusion in Nigeria should focus on accelerating digital adoption, financial literacy, expanding rural agent networks, and enhancing consumer protection to bridge the gender and regional divide.