National Financial Inclusion Strategy (Revised)

The Central Bank of Nigeria (CBN) adopted the National Financial Inclusion Strategy (NFIS) in 2012 which has been updated in this October 2018 revision and reflects 2020 objectives. The following are excerpts from the NFIS.

Pertaining to the original 2012 NFIS. 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).

This NFIS provides revised objectives, priorities and principles for driving financial inclusion in Nigeria. It was developed with input from a broad range of interviewees, working groups, data sources and reports. The process involved:a. Guidance and direction from a “core team” of key stakeholders.b. Numerous group discussions, workshops and interviews.c. Experience sharing and insights from consumers.d. Assessment of existing financial products and services.e. Assessment of the regulatory framework for financial inclusion.f. Data gathering from published sources (EFInA Access to Financial Services in Nigeria Survey reports, World Bank Global Findex report, etc.).

Key findings included financial inclusion progress due to its importance to stakeholdders as a national development tool; some of the articulated strategies have become outdated or inappropriate (such as point of sale (POS)). Furthermore, mobile money penetration has been limited due to restrictive policies and regulations and its pace of adoption has been slow due to limited understanding of how it works and stakeholder opportunities; challenging situations (macroeconomic and security); and stagnation due to cultrual and religious factors.

This revised National Financial Inclusion Strategy sets a clear agenda for significantly increasing access to and usage of quality and affordable financial services by 2020. The recommendations are based on a review carried out on the original strategy from October 2017 to June 2018 and the need to focus priorities on access and strategies that will provide the deserved results in the target year.1.1 Overview of the 2012 National Financial Inclusion Strategy (NFIS)Coordinated efforts to address the financial inclusion gap in Nigeria can be traced back to the development of the National Financial Inclusion Strategy in 2012. The Strategy defined financial inclusion as achieved “when adults in Nigeria have access to a broad range of formal financial services that are affordable and meet their needs and are provided at an affordable cost”. The Strategy set overall targets and specific targets for products, channels and enablers.a. Targets:the two overall financial inclusion targets were 80% overall (formal and informal) financial inclusion and 70% formal financial inclusion by 2020. There were 15 additional targets for channels, products and enabling environment as well as 22 key performance indicators (KPIs)...

Five priorities will be most crucial to increasing financial inclusion in Nigeria as follows: 1. Create an enabling environment for the expansion of DFS. 2. Enable the rapid growth of agent networks with nationwide reach. 3. Harmonise KYC requirements for opening and operating accounts/mobile wallets on all viiifinancial services platforms.4. Create an enabling environment to serving the most excluded.5. Improve the adoption of cashless payment channels, particularly in government-to-person and person-to-government payments.

Table of Contents

  • Acknowledgments
  • Executive Summary
  • National Financial Inclusion Targets
  • Implementation Governance arrangements
    • Introduction
      • Overview of the 2012 National Financial Inclusion Strategy (NFIS)
      • Background to the Revised NFIS
      • Importance of financial inclusion
    • NFIS Stakeholder Roles and responsibilities
    • Current outlook and prospects for financial inclusion
      • State of financial inclusion in Nigeria
      • Financial Inclusion progress across Geopolitical zones
      • Critical barriers
    • Principles for Accelerating Greater Financial Inclusion
      • Create a conducive environment for the expansion of DFS
      • Promote rapid growth of agent networks
      • Harmonise KYC requirements to increase access to financial services.
      • Create an environment conducive to serving the most excluded
      • Drive adoption of cashless payment channels.
    • Key Financial Inclusion Targets
      • Product Target
      • Channels Target
      • Key Performance Indicators (KPIs)
      • Measurement framework
    • Implementation approach and plan
      • Structure for coordination and organisation
      • Action plan
    • Proposed Roles and Responsibilities for Key Stakeholders
    • Possible Risks and Mitigation Strategies
  • Annex: Approach to strategic prioritisation
    • Appendices
    • List of Acronyms and Glossary of terms

List of Figures

  • Figure 1: NFIS Stakeholders in Nigeria
  • Figure 2: Regulators’ financial inclusion related activities
  • Figure 3: Government Agencies financial inclusion activities
  • Figure 4: Nigeria Financial Inclusion rate over time
  • Figure 5: Overview of financial inclusion situation in Nigeria, 2016
  • Figure 6: Financial Access by Geopolitical zones
  • Figure 7: Financial Inclusion status by Age group
  • Figure 8: Progress on financial inclusion targets
  • Figure 9: Five target demographic groups are excluded at especially high rates
  • Figure 10: Overview of the Financial Inclusion Secretariat in Nigeria since the launch of the NFIS
  • Figure 11: The Financial Inclusion Picture in 2016

List of Tables

  • Table 1: NFIS Product and Channel Targets
  • Table 2: Critical Barriers to Financial Inclusion
  • Table 3: Mapping of design principles by priority area
  • Table 4: Key Performance Indicators
  • Table 5: Refreshed NFIS action plan, 2018-2020

Document Details

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Date of Document: 
Monday, October 1, 2018
Document Authors: 
Central Bank of Nigeria
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