Accelerating Financial Inclusion for Sustainable Development in Nigeria

Muftau Adesina Abayomi ,Oluyemi Philip Ologunwa

doi:10.7176/rjfa/12-16-05

Abstract

Financial exclusion constitutes a major sustainable development challenge in many developing countries such as Nigeria. This paper examines the financial inclusion efforts in Nigeria, the implications of strong financial inclusion for sustainable development, and the challenges militating against financial inclusion in Nigeria. The paper also discusses the roles of rural banking scheme, Nigeria Deposit Insurance Corporation, and various types of banks as well as the non-interest banking policy and alternative banking channels in financial inclusion. The paper suggests that a strong financial inclusion of the hitherto inadvertently financially excluded and the poor segments of the society would increase economic activities, employment, consumption, government expenditure as well as economic growth and sustainable development. It also identifies the challenges militating financial inclusion in Nigeria to include; low financial literacy, cumbersome banking documentation and minimum operating balance requirements, inadequate and uneven distribution of bank branches and alternative banking channels, low uptime and malfunctioning of e-channels, growing poverty incidence, and high unemployment rate, among others. The paper recommends the re-introduction of rural banking scheme, public enlightenment, minimization of banking documentation and minimum operating balance, increased deployment of alternative banking channels, and stiffer penalty against corruption, among others. A strict implementation of the suggested recommendations would accelerate financial inclusion and ensure sustainable development in Nigeria. Keywords: Financial inclusion, Financial exclusion, Sustainable Development, Nigeria DOI: 10.7176/RJFA/12-16-05 Publication date: August 31 st 2021

Highlights

The debate on financial inclusion has been gaining momentum among policy makers, researchers and development finance organizations, especially in developing countries
The global pursuit of financial inclusion as a vehicle for economic development had a positive effect in Nigeria, according to the Central Bank of Nigeria [CBN] (2018), the exclusion rate reduced from 53.0 % in 2008 to 46.3 % in 2010, and the latter statistic is still considered to be on the high side
Financial inclusion is a veritable way for strengthening the financial system and generating inclusive growth with a view to achieving sustainable development in Nigeria

Summary

Introduction

The debate on financial inclusion has been gaining momentum among policy makers, researchers and development finance organizations, especially in developing countries This is partly because a large number of people have been financially excluded, and have slipped into the abyss of poverty. According to the Centre for Financial Inclusion [CFI] (2010), financial inclusion is a state in which all who can use them have access to a full suite of quality financial services provided at affordable prices, in a convenient manner, and with dignity for the clients It is a state where financial services are delivered by a range of providers, most of them private sector, and reach everyone who can use them, including the poor, disabled, rural, and other excluded populations. Lack of access to formal financial services limits their ability to climb out of poverty, mitigate risks and participate in productive economic activities

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Conclusion