The journey toward financial inclusion remains one of the primary objectives of the current administration, which will end in a few weeks. Evidently, there has been a frantic push by President Muhammadu Buhari to ensure that many Nigerians are financially included.
Unquestionable progress has been made with many Nigerians increasingly being onboarded into the banking industry. However, the total exclusion rates still exceed the set objectives. Today, 57.4 milllion Nigerians have BVN number out of an estimated population of over 200 million.
In February 2014, the Central Bank of Nigeria (CBN), the Nigerian Interbank Settlement System (NIBSS), the bankers committee, and deposit money banks joined forces to begin the Bank Verification Number (BVN) program.
The BVN has remained a component of the bank’s Know Your Client (KYC) standards as part of initiatives to minimize the burden associated with incorrect client identification in banking.
The CBN is dedicated to actively enlisting potential banking customers in the unorganized sector onto the BVN system after realizing the difficulty at hand.
According to Godwin Emefiele, the nation’s top bank uses the payments system as a tool to further the nation’s objectives for financial inclusion. A key component of this strategy is the BVN system, which permits the creation of credit profiles that may facilitate easier access to credit.
To increase customers’ payment alternatives and tighten up payment system regulation, the Payments System Vision (PSV) 2025 was unveiled. At the moment, BVN is supporting the creation of credit profiles for banking customers, which will aid in enhancing access to credit for credit-worthy borrowers by banks.
Deepening Financial Inclusion
Although the BVN system registration is praiseworthy, more needs to be done to meet the country’s financial inclusion goals. It is still very feasible to develop Nigeria’s economy and bring more Nigerians into the official financial system.
The informal nature of the Nigerian economy, which has a huge population of people who operate outside of the conventional banking system, is one of the main obstacles to affecting enrollment in the BVN system.
The CBN has already collaborated to this effect, but it has to be more strategic and work rigorously with other stakeholders to capture more Nigerians into the financially included group. The private sector is keen to see financial inclusion become a reality, and that calls for more partnerships.
Again, more awareness campaigns and education are required to persuade Nigerians to register for the BVN in order to improve the BVN registration system and achieve the country’s financial inclusion goals. To reach more Nigerians and promote BVN registration, financial institutions can also look into alternate channels such as mobile and digital platforms.
In order to establish an atmosphere that will encourage more Nigerians to use the formal banking system, the CBN should also keep working with the private sector and other stakeholders. This can involve offering financial services that are more reasonably priced and cater to the needs of low-income individuals and small companies, such as loans and savings products.
It is time to start going into the rural areas to meet many of those Nigerians who are financially excluded. The concentration of banks and other industry stakeholders in the cities will slow down the penetration of financial inclusion. The basics start with opening a bank account.
However, regulators must also start understanding that poor rural dwellers who earn less than a dollar may have no drive to open an account with the bank, let alone adopt digital payment channels.
The incoming administration must start initiating strategic plans that will pull Nigerians out of poverty by addressing insecurity and micro and macroeconomic issues. The country’s economic indices are all negative, and that must be addressed to pave the way for poor Nigerians to start seeing financial inclusion as something beneficial to them and the entire country.