Financial Inclusion
According to World Bank, financial inclusion means individuals and businesses having access to useful and affordable financial products and services that meet their needs delivered in a responsible and sustainable manner. These needs include transactions payments, savings, credit and insurance. Financial inclusion is the number 7 amongst the 17 Sustainable Development Goals, SDGs, and it's identified as key to economic development especially in the areas of job creation, poverty reduction, wealth creation, improved welfare and general living standard.
In pursuance of this, the Central Bank of Nigeria (CBN) launched National Financial Inclusion Strategy on October, 2012. The program did not commence until 2018 when the CBN issued a Revised Strategy.
Nigeria Financial Inclusion Strategy
The Financial Inclusion Strategy (NFIS) launched in 2012 by the Central Bank of Nigeria (CBN) was aimed at improving access to financial services and products by the Nigerian adult population.
The strategy was targeted at achieving a 34% increased access to financial services and products by the year 2020, which means attaining 70% inclusion rate.
What does FinTech Mean?
FinTech, which stands for Financial Technology means the use of technology and innovation that delivers financial services through software. FinTech software are used to improve service delivery, conveniently at reduced cost especially labour. Some of the technologies used in FinTech include blockchain, big data, AI, API, ToI. These technologies are used to provide services such as cryptocurrency mining, assets management and trading, remittances and payment switching, processing and settlement, online savings, loan, customer care services and much more.
FinTech Growth in Nigeria
Read also: List of CBN Approved FinTechs, Others in Nigeria
FinTech Services in Nigeria
Major services rendered by these firms include:
- Payments
- Lending
- Savings
- Investments
- Insurance
- Provision of technological infrastructure for efficiency of traditional financial institutions
Read also: How FinTech Companies Make Money
How FinTech is Impacting Financial Inclusion in Nigeria
FinTech leverages on technologies to offer financial services, up scales increased broadband penetration, which promotes financial services delivery in rural areas, provides consumers with bespoke services (digital banking, mobile lending and savings), promotes access to credit for small and medium-sized enterprises (SMEs), leads to increased efficiency of traditional financial institutions, and most importantly, drives financial inclusion.
The EFInA 2020 Report enumerated actions that could lead to a higher number of people being included in the financial system and identifies the following as having the highest potential impact if well executed: innovation enablement, digital ID, credit infrastructure, digital infrastructure and technology talent pipeline. The report commended FinTech in leading in these areas by leveraging technology to address unmet customer needs in Nigeria.
Read also: Untapped Opportunities in Agency Banking and Mobile Money Business in Nigeria