By Ukpe Philip
The Central Bank has explained that Nigerian banks are short of the right products and services to meet the needs of millions of Nigerians.
The CBN Director of Payment System Management, Musa Jimo, said the loophole explains the reason for so many dormant accounts in banks across the country.
He said this during a panel discussion at the International Financial Inclusion Conference.
The focus of the discussion was on how Nigeria can reach 95 per cent financial inclusion by 2024.
The CBN revealed that Nigerian financial inclusion has reached 65 per cent, which is short of the target.
Nigeria’s financial inclusion target was to reach 80 per cent inclusion by 2020.
But inclusion was 64 per cent by the end of 2020, according to a 2021 report by the Enhancing Financial Innovation & Access (EFInA).
The apex bank said it is currently targeting 95 per cent by the end of 2022.
According to data from the Nigeria Inter-bank Settlement System (NIBSS), there are 44.5 million dormant bank accounts as of May 2021.
Jimo lamented that indiscriminate charges erode the little savings of Nigerians which scare many prospects.
Jimo explained, “Ten years ago, we had a situation in this country where people do not have verifiable credentials.
“If you go to a bank and you open a bank account, the first thing you encounter is that you should bring an international passport or a valid driver’s license. We have had a situation in this country where you put your money in your bank account and over time, it is eroded by the interest that your banks charge them.
“And so, we had a myriad of problems that pulled people away from the financial sector. The Central Bank as a regulator has done well to identify this problem and begin to solve it through regulatory interventions.
“So, we came up with Mobile Money regulations basically to push digital financial services to the nooks and crannies of this country.
“We also came with the three-tier KYC, the reason was that we actually wanted to tier the requirements for having access to ban accounts. You don’t need to have those kinds of stringent identification and documents to open a bank account.”
He noted that conversations on how to onboard the unbanked Nigerians should focus on products that target their needs.
The Director explained that most Nigerians will not opt for banking services if such services do not meet their needs.
Jimo added, “We have moved beyond that. The conversation now is about the fitness of the products and services. The products and services that were actually given to these people do they feel them?
“You can bring a lot of products and services if it doesn’t fit my needs, I won’t use them which is why you have a lot of dormant accounts. That is why you have a lot of accounts that are open but are not used because the products and services which they were opened do not fit them.
“The conversation now should be the kind of creative products and initiatives we can bring into the financial system, banking system such that they will fit those people that are excluded.”
Many Banks Lack Creative Products To Attract Customers—CBN is first published on The Whistler Newspaper
Source: The Whistler.