43 of nigerians remain financially excluded ― lbs

According to the latest data from the Central Bank of Nigeria (CBN), approximately 43% of Nigerians remain financially excluded, meaning they do not have access to formal financial services such as bank accounts, credit, or insurance.

This is a significant challenge for the country, as financial inclusion is essential for economic growth, poverty reduction, and social development. Financial exclusion can lead to a range of negative consequences, including:

  1. Limited access to credit: Without a bank account or credit history, individuals may struggle to access loans or credit to start or grow a business, purchase a home, or finance education.
  2. Higher costs: Financially excluded individuals may be forced to rely on informal lenders, who often charge exorbitant interest rates, leading to debt traps and financial instability.
  3. Limited economic opportunities: Financial exclusion can limit access to formal employment, entrepreneurship, and other economic opportunities, perpetuating poverty and inequality.
  4. Reduced financial resilience: Without a safety net, financially excluded individuals may be more vulnerable to financial shocks, such as job loss, illness, or natural disasters.

The Lagos Business School (LBS) has identified several factors contributing to financial exclusion in Nigeria, including:

  1. Low financial literacy: Many Nigerians lack basic financial knowledge, making it difficult for them to navigate the formal financial system.
  2. Limited access to financial infrastructure: Rural areas and low-income communities often lack access to banks, ATMs, and other financial services.
  3. High costs: Fees and charges associated with financial services can be prohibitively expensive for many Nigerians.
  4. Limited financial inclusion policies: While there are initiatives to promote financial inclusion, more needs to be done to address the root causes of financial exclusion.

To address this challenge, the Nigerian government, financial institutions, and other stakeholders must work together to:

  1. Improve financial literacy: Educate Nigerians on the importance of financial inclusion and provide training on basic financial skills.
  2. Increase access to financial infrastructure: Expand financial services to rural areas and low-income communities.
  3. Reduce costs: Implement policies to reduce fees and charges associated with financial services.
  4. Implement targeted policies: Develop initiatives specifically designed to address the financial exclusion of vulnerable groups, such as women, youth, and people with disabilities.

By addressing these challenges, Nigeria can work towards achieving greater financial inclusion and reducing the number of financially excluded individuals.