CBN, NDIC, and others members of the financial sector brainstormed in Abuja over low-insurance patronage

Tackling low-insurance patronage in the country was the focal point of Friday when the Central Bank of Nigeria (CBN), the Nigerian Deposit Insurance Corporation (NDIC), the National Pension Commission (PenCom) and other members of the financial sector brainstormed in Abuja to unveil a new policy on deepening financial inclusion.

Presenting the communique of the two-day National Financial Inclusion Conference in Abuja, the Director, Consumer Protection Department, CBN, Mr Kofo Salam-Alada, said that participants believed that insurance culture should spread among the citizenry as it holds the key to unlocking the economic potential of the country, while addressing current national malaise like backwardness and poverty alleviation dominant in the rural areas.

According to him, participants observed that there was currently more awareness about banking and other similar financial services than insurance.

“It was for this reason that of all the financial services, insurance is one of the least patronised product.

“We have agreed to put together a delegation to visit the regulatory agency for insurance that is the National Insurance Commission.

“We will also visit the insurance associations to look at the strategies they are working on to advance insurance for financial service penetration.

“The participants also identified the need to deepen legislative backing for the insurance industry in addition to the existing compulsory insurance like the third-party insurance,’’ he explained.

Salam-Alada added that micro insurance scheme could be used as a tool to achieve financial inclusion and assist the industry to cover the observed gaps between insurers and the grass root population.

The director also spoke on the findings by Enhancing Financial Innovation and Access (EFInA), which shows that the North-East and North-West patronises financial services the least.

“We recognised that the North-East and North-West have low financial penetration and this was attributed to cultural and religious factors.

“So, the conference resolved that providers of financial services should be encouraged to devise more products that would be acceptable in these areas.

“In addition to that, stakeholders using our various platforms will also devise programmes that will appeal to the people in the regions and bring them into the inclusion bracket.

“Salam-Alade urged financial service providers to consistently deliver good services to their customers so that they, in turn, will not discourage others to use these products.”

According to the EFinA 2018 survey, 63.6 per cent of Nigeria’s adult population have access to financial services, while 36.6 per cent are still financially excluded.

EFinA is a non-governmental organisation and a financial-sector development organisation funded by the DFID and Bill and Melinda Gate Foundation.

The survey was anchored on several indicators including Banked Population; Remittances; Savings with a Bank; Payments; Received Income; Loan with a Bank; and Banking Agents, among others.

According to EFInA, 60.1 million of Nigerians do not have a bank account; 96.3 million do not use mobile money and 97.9 million do not have insurance.

The EFInA survey report concluded that three factors of affordability, institutional exclusion and lack of awareness were the biggest obstacles to financial inclusion.