Policymakers and development experts worldwide widely acknowledge the role of financial inclusion in enhancing economic growth and development. According to the World Bank Group, inclusive finance drives growth and resilience among the less privileged. Digital financial services reduce transaction costs and expand access, though they also pose consumer and cyber risks. To that extent, the recent report released by the Enhancing Financial Inclusion and Advancement in Nigeria (EFInA) has raised concerns about how Nigeria can maximise the benefits of financial inclusion and thus develop Nigerian society in this regard.

The EFInA report, presented in Abuja by its Chief Executive Officer, Foyinsolami Akinjayeju, on the outcome of its recent survey, revealed that greater access to bank accounts, digital platforms, and other formal financial services was not necessarily improving the financial resilience of Nigerians. The report indicated that Nigeria’s financial inclusion has risen to 79 per cent, but the expansion has yet to translate into meaningful financial security for millions of Nigerians, with only one in four adults classified as financially healthy. This is quite worrisome. This is contrary to the World Bank’s expectation that access to affordable financial services, such as payments, credit, savings products, and insurance, is a critical condition for poverty reduction and economic growth. This is in line with global experiences, especially in Emerging Markets and Developing Economies (EMDEs), where data indicate that as much as 80 per cent of adults who save could more easily cope with emergencies, and that widespread adoption of digital payments by individuals and larger businesses has the potential to motivate the formalisation of smaller businesses. Along these lines, the World Bank Group supports emerging and developing economies in harnessing digital financial services responsibly, through policy, lending, and investments.

Given the findings of the EFInA report, the question thus arises as to why the Nigerian situation appears to differ from global expectations. Expectedly, financial inclusion in a country should go beyond the enhancement of the number of new bank accounts among the less-privileged, or of customers or that of availability of digital channels. To determine whether availability of more access to financial services is helping Nigerians, especially those in the rural areas, to withstand shocks, meet their needs, build wealth and reduce financial stress, policymakers would need verifiable information that the economy as well as the living standards of the ordinary people are being enhanced. Presently, formal credit remains low despite improvements in access. Available data from the EFInA survey indicates that formal financial inclusion stands at 85 per cent in urban areas, compared with just 58 per cent in rural communities, highlighting a 27-percentage-point gap. This urban/rural divide should be a cause for concern.

Issues that need to be looked at, may include evaluating again, the socio-economic structure of the Nigerian society and the spatial distribution of productive activity to determine whether any region is short-changed in the inclusion of the government’s development programmes that led to the unfavourable outcome of the effect of increased financial inclusion in the creation of wealth among the less privileged. An issue that needs to be properly evaluated is the level of education of the rural dweller. The level of literacy has a great part to play in the individual’s capacity to leverage the opportunities financial inclusion can confer. This may call for the inclusion of public enlightenment programmes at the rural and suburban levels, to equip the people living in those areas with knowledge of how wealth can be created by exploring investment and credit availability opportunities to grow their businesses as well as earn some investment income through the use of digital financial products.

Education and public enlightenment can open this door of opportunities for these wary Nigerians. The state and local governments may need to delve into this area of advocacy in collaboration with financial institutions to bridge the education and knowledge gap in this regard.

The gender issue is also important here. There is a need to empower more women, especially in the rural areas, to wholeheartedly embrace the use of digital financial products. Across the developing world, women play a very critical role in the sustenance of the rural economy in retail trade, agriculture and agro-allied businesses as well as in the social care sector. The local governments across the country have their work cut out for them on this issue of female gender empowerment. Indeed, the gender gap remains a major concern.

Also, the situation in the northern part of the country needs to be investigated. Poor education and enlightenment, gender imbalance in participation in economic activities and thus financial inclusion, are all worse in that region relative to the others. The situation calls for the attention of the political leaders in the region, across the various tiers of government, to address these issues.

The apex monetary authority may need to enhance the implementation of relevant programmes in that region in such a way that other parts of the country would not be left behind. There are lots of benefits in the promotion of financial inclusion in Nigeria and these should not be lost.