BusinessDay 28 Mar 2018

20
BUSINESS DAY
C002D5556
Wednesday 28 March 2018
Supported
Financial inclusion, a catalyst
for Nigeria economic growth
ENDURANCE OKAFOR
At a time when Nigeria’s
economic
growth is at a fragile
state, financial
inclusion could not
be more important. Financial
inclusion means individuals
and businesses, irrespective of
their income level, have access
to affordable and useful financial
services and products which
are beneficial to them and the
economy at large.
Nigeria recorded 1.92 percent
Gross Domestic Product
(GDP) growth year-on-year
in the fourth quarter of 2017,
representing the third consecutive
expansion in the positive
trajectory after exiting its worst
recession in second quarter of
last year.
Although the growth remains
fragile and not inclusive. Analyst
are however of the opinion that
financial inclusion can be a catalyst
to achieving inclusive growth
in Africa’s largest economy.
Given that low-income earners
constitute a significant portion of
the population and have a huge
chunk of the economy’s idle
funds, increased access promotes
capital accumulation, credit creation,
increased economic activity,
and increased investment.
The World Bank cited out the
fact that a bank account is a step
to broader financial inclusion.
Therefore an establishment of
an account relationship can
pave way for the customers to
avail the benefits of a variety of
financial products, which are
not only standardized, but are
also provided by institutions
that are regulated and supervised
by credible regulators that
ensures safety of investment.
Bank accounts can also be
used for multiple purposes,
such as, making small value
remittances at low cost and purchases
on credit. As such bank
account provides the account
holder not only a safer means
of keeping his/her fund but also
provides access to use of other
low cost and convenient means
of transaction.
For the regulator, transparency
in the flow of transactions
makes monitoring and compliance
easier, while for the economy,
increased financial makes
capital accumulation easier and
more transparent.
And this in a long run will
lead to economic growth and
development, as the government
will also be able to generate
revenue from transactions
that it monitor. Analysts that
gave their view on the issue were
however of the opinion that the
larger money in the economy
are in the informal sector and
it can impact positively on the
economy of Nigeria if only they
can be included.
The World Bank however,
stated that 59 percent of the 2
billion adults worldwide who
do not have access to a basic account
cited lack of funds as the
barrier to opening one.
An expert who spoke to BusinessDay
was of the opinion that
the high cost of running the affairs
of the bank are the reasons
why access to financial services
in the country are expensive,
although he said the banks are
doing their best to ensure they
bring down the costs of operating
and having a bank account.
Consequence of financial
inclusion on the other hand is
to minimize the scale of economic
activities that can be
financed and hence, limiting the
potentials for higher economic
growth.
The Nigeria government in
its quest to ensure a larger number
of its citizens are financially
included has introduced different
policies and strategies that
can help achieve this aim and
they include; the adoption of the
rural banking programme in the
late 1970. This was introduced
by the Central Bank of Nigeria
(CBN) in 1977 with the aim of
achieving one branch bank in
each of Nigeria’s local government
areas.
One of the critical initiatives
in this same direction was
the incorporation of Financial
System Strategy (FSS2020). The
initiative represents a holistic
and strategic road map and
framework for developing the
Nigerian financial sector into a
growth catalysts that will enable
Nigeria be one of the 20 largest
economies by 2020, as compiled
from the CBN website.
Nigeria currently have 58.4
percent financial inclusion rate
but it wish to achieve 80 percent
and 20 percent exclusion rate
by 2020.
“The target is attainable,
considering the current level
of technology in the banking
sector, as it makes possible to
reach people who were initially
unreachable and the insurance
companies too are taking
leverage of technology,” Ayo
Akinwumi, Head of Research
FSDH merchant bank told BusinessDay
by phone
Heritage Bank empowers 5, 544 pupils on financial literacy to secure economy
As part of efforts to support
the Central Bank
of Nigeria’s Financial
Literacy Day, which
marks the Global Money Week,
Heritage Bank Plc empowered
5, 544 (pupils and teachers) in
11 secondary schools across
the country.
The CBN’s Financial Literacy
Day is a globally celebrated
event to promote savings, drive
Financial Inclusion, invariably
gain a higher standard of life
and secure the economy, which
is the crux of the Bank’s financial
literacy programs.
For the fifth year running,
Heritage Bank has successfully
commemorated the CBN
Financial Literacy Day.
This year, CBN directed
Heritage Bank to adopt schools
in Benue, Adamawa, Jigawa,
Plateau, Imo, Bayelsa and Ogun
States for Financial Literacy
workshop and the day afforded
5, 544 participants (teachers
and students) with financial
education.
The workshop was premised
on the Global Money Week
theme: “Money Matters Matter”.
Students and teachers
were taught several concepts
including; the role and management
of money, needs and
wants, benefit of budgeting,
spending and savings. Whilst,
others include savings with a
financial institution, the basics
of financial education and Heritage
Bank savings product for
young persons (Bud Account).
Addressing some of the
participants, the CEO/MD
of Heritage Bank, Ifie Sekibo
reiterated the importance for
young Nigerians to financially
and economically equipped for
the development of the nation.
According to him, Nigerian
youths and those around the
world need to be fortified economically
via financial literacy
knowledge acquisition, which
will foster the importance of
understanding savings culture
and entrepreneurship.
In line with its mission to
create, preserve and transfer
wealth across generations,
Sekibo said Heritage Bank
developed the HB Bud Savings
Account to help its customers
to create wealth for the children
and provide them a future
of financial independence.
“As a bank committed to
creating, preserving and transferring
wealth from one generation
to the next, we have
consistently maintained our
position as the leading brand in
financial inclusion initiatives
by leveraging on CBN’s mandate
to impact schools across
the geopolitical zones and improve
financial inclusion,” the
MD reiterated.
According to him, opening
a savings account for a child is
one of the best ways to introduce
him/her to that concept
of saving at an early age.
He explained that one of the
ways the bank has continued
to promote savings amongst
children is the introduction of
“My day as a banker” which is
also the Heritage Bank’s unique
way of promoting financial literacy
among children, which is
the core of the HB Bud Savings
Account, specially designed to
promote savings habit among
children and youths.
Meanwhile, other senior
employees of the bank visited
other select schools in
the country as directed by the
apex bank to promote financial
literacy.
According to Heritage Bank,
today’s children and youth
should become empowered
economic citizens, capable of
understanding the importance
of saving, and equipped with
the skills to be employed and
create their own livelihoods.
The bank wants young people
to learn to manage their money
wisely. By empowering children
and youth, Heritage Bank
can help them create a positive
wave that will expand from
themselves, to their families,
to entire communities and the
economy at large.