13 February 2013

Nigeria: CBN to Commence National Financial Inclusion Strategy in Borno

The Bankers' Committee of the Central Bank of Nigeria, CBN, on Tuesday said it has selected Borno State for the pilot scheme of the national financial inclusion strategy.

The Managing Director of Access Bank Plc, Aigboje Aig-Imokhuede, told reporters at the end of the Committee's meeting in Abuja on Wednesday that the successful implementation of the project in the state would guide the bank's decision to replicating it in other states nationwide.

The proposed strategy, according to Mr. Aig-Imokhuede, is scheduled to take off in March, pointing out that the choice of Borno as the pilot of the strategy was in furtherance of the resolutions reached at the retreat held in Calabar last year to ensure that un-banked Nigerians have access to financial services.

The Access Bank boss, who was accompanied by his counterpart in Stanbic IBTC Bank, said the choice of Borno came after extensive consultations with key stakeholders, including the state government; CBN; Nigeria Deposit Insurance Corporation, NDIC; Nigeria Communications Commission, NCC; Securities and Exchange Commission, SEC; and the Consumer Protection Council, CPC.

Borno is rated by the CBN as one of the states with the highest level of financial exclusion in the country.

Mr. Aig-Imokhuede, who described the Borno State experiment as pivotal in getting the financial inclusion strategy to other states in the country, said studies conducted on the demographic and other socio-economic distributions of the indigenes of the state would be used to make it a success.

He said substantial efforts and resources were also being committed to building the infrastructure capacity for its effective implementation, pointing out that the overall target of the banks is to raise the level of financial inclusion in the state to about five million people.

Currently, only about 280,000 indigenes have access to financial services. Women, youth and rural people are particularly excluded and need to be integrated into the country's financial system, he said.

"As at 2010, out of about five million people in the state, only 280,000 people had access to finance; about 14 per cent of the population were included in the savings; less than two per cent of the people had access to credit; about 2.9 per cent of the people of Borno had pension, and less than one per cent had access to insurance," Mr. Aig-Imokhuede said.

He said a national average target financial inclusion strategy for 2020 has not adopted those national averages for Borno, adding that the idea is to get the number of ATMs from 95 to over 770 by 2020, and branch network from 72 branches to over 120 by 2020 and Point-of-Sales, POS, from less than 300 to just about 10,000.

The Committee also reported on the progress so far on its ongoing Customer Identity Management, CIM, project expected to radically reduce the cost of banking transactions, improve customers' identity and reduce frauds on completion.

The committee has set a new target of N3 as cost of transfer, COT, per million for the current year as against the N5 charged in 2012 as part of the long-term measures to ease the burden on bank customers.

On the contentious issue of ATM charges, the Committee said the zero charge policy was already being implemented, adding that "no bank should charge any customer for inter-bank transactions and if any customer is charged, the customer should report appropriately to the authorities."

The apex bank's Director of Banking Supervision, Agnes Martins, said the purpose of the recent circular on macro prudential guidelines was as a result of emerging risks to help the banks continue to be safe and resilient and be able to withstand systemic shocks or any other kind shocks that might come their way.

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