•‘26% of Nigerian adults still outside formal financial system’

Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, said raising capital requirements for banks would help them to increase credit to underserved communities, thereby enhancing financial inclusion in Nigeria.

Though some progress has been made in the financial inclusion drive, Cardoso said 26 per cent of Nigerian adults are still outside the formal financial system.

He picked micro, small and medium-scale enterprises (MSMEs) as a likely top beneficiary of a more capitalised banking sector.

Speaking at the 2024 International Financial Inclusion Conference held in Lagos yesterday, he explained that higher capital would empower financial institutions to better serve marginalised groups, including the MSME sector, which forms the backbone of Nigeria’s economy.

As part of the initiative to empower small businesses, the CBN, in partnership with the Development Bank of Nigeria (DBN) and Bank of Industry (BOI), launched the Women Entrepreneurs Finance Initiative (We-Fi) Code.

This strategic programme seeks to improve women’s access to financial resources, enhancing economic participation and, in turn, driving national growth.

Cardoso also highlighted the CBN’s efforts to stabilise Nigeria’s economy, manage inflation and instil public confidence, reiterating that financial inclusion is a core objective in the journey toward growing a $1 trillion economy.

He said: “The CBN is keen on ensuring its financial inclusion policies and initiatives address the peculiar access to finance barriers for underserved populations, particularly women, youth, and MSMEs. The importance of this mission cannot be overstated, as I have reiterated that financial inclusion is foundational to Nigeria’s sustainable economic development.

“In line with its efforts to deepen financial inclusion, the CBN recently introduced new minimum capital requirements for banks. This strategic move ensures that banks are well-capitalised, enabling them to take on greater risks, particularly in underserved markets. With stronger capital bases, banks can provide more loans and financial products to MSMEs, rural communities and other vulnerable segments that have previously struggled to access formal financial services.

“This policy not only strengthens financial stability but also catalyzes inclusive growth. By enabling banks to extend more credit to MSMEs, we enhance job creation and productivity. Furthermore, with increased capital, banks can invest in technology and innovation crucial for driving digital financial services such as mobile money and agent banking. These technologies are key to breaking down geographic and economic barriers, bringing financial services to even the most remote areas.”

The CBN boss said women played a critical role in driving inclusive growth and the bank in launching the We-Fi initiative is poised to encourage women to be more financially included, especially with access to finance.

“Research shows that when women are financially empowered, they reinvest in their families and communities, creating broader socio-economic benefits. Yet, women in Nigeria are disproportionately excluded from the formal financial system.

“The CBN has made significant strides in promoting financial inclusion for Women and youth, particularly through Frameworks aimed at closing gender gaps and regulatory support for digital platforms that offer easier access to financial services for these vulnerable groups. With programs aimed at financial literacy, the CBN is also empowering young Nigerians to become financially independent, fostering entrepreneurship and driving economic growth across the country,” he said.