Banks and other stakeholders in the financial sector have been advised to focus on priority areas in implementing financial inclusion so as to fast-track the achievement of the goals.
Dr. Olayinka David-West, a Fellow of the Sustainable Inclusive Digital Financial Services Initiative, Lagos Business School, gave this advice while speaking at the launch and exhibition of the Global Segmentation Framework report.
The report, according to David-West, revealed that there exist some constraints for the unbanked and banked population in adopting digital financial services and utilizing them.
Noting that Nigeria is not on track on meeting the financial inclusion goal, she said: “I think the implementation ability is what we now really need to work on collaboratively because this is not a one person or industry task”, she said.
Speaking further, David-West stressed the need for banks to make efforts towards increasing their pool of funds so that they can extend credit to the financially excluded at reduced cost.
She stated: “All financial services providers have their risk profiling criteria that they use to decide on how they are going to issue credit or overdraft or whatever you call it.
The interest rate that they are going to use is subject to market rate and this is one of the reasons or core argument for mobilizing financial services.
“They have to now talk about interest cost, all the associated cost and then say okay what is the associated cost in general and that is how they price their interest rate. Why they price the interest rate is because the supply is limited.
So if they boost and increase the supply of pool of funds that will be available for credit, then hopefully interest rate will begin to drop.”
Explaining some of the findings of the report, Nneka Eze, Partner and Director Nigeria, Dalberg, said that in Nigeria, 36 percent of male population living in the rural areas use informal financial tools while 23 percent do not own basic phones.