Financial inclusion has the potential to unlock significant economic growth, says Cardoso

The Governor, Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso on Tuesday stated that financial inclusion has the potential to unlock significant economic growth, particularly through the empowerment of small and medium-sized enterprises (SMEs), women and other vulnerable segments of the population.

Speaking at the 2024 International Financial Inclusion Conference with Theme: Inclusive Growth—Harnessing Financial Inclusion for Economic Development, he expressed that  SMEs are responsible for over 80per cent of employment in Nigeria, yet many struggle to access the credit needed for expansion. Financial inclusion for SMEs is essential to unlock the full potential of this sector, and the Nigerian government remains committed to supporting these enterprises.

“Similarly, women play a critical role in driving inclusive growth. Research shows that when women are financially empowered, they reinvest in their families and communities, creating broader socio-economic benefits. Yet, women in Nigeria are disproportionately excluded from the formal financial system,” he said.

He noted that the CBN has made significant strides in promoting financial inclusion for Women and youth, particularly through Frameworks aimed at closing gender gaps and regulatory support for digital platforms that offer easier access to financial services for these vulnerable groups.

“With programs aimed at financial literacy, the CBN is also empowering young Nigerians to become financially independent, fostering entrepreneurship, and driving economic growth across the country,” Cardoso added.

He stated that the Nigeria’s growing mobile phone penetration provides opportunity to expand access to financial services.

He noted that one of the most transformative tools for financial inclusion has been the adoption of digital payment channels leveraging mobile technology.

“Interoperable payment platforms have enabled millions of Nigerians to send payments, save, and access credit without traditional bank accounts.

“Technological advances have democratized financial services, allowing people in remote areas to participate in the economy and this government is committed to creating an enabling environment for these innovations to thrive, through policies that foster competition, innovation, and financial stability,” he said.

He expressed that inclusive finance is not just about enhancing the provision of appropriate financial products and services to unbanked populations, stressing that it is an essential fulcrum upon which National economic growth and development can be achieved.

“As we gather here today, we reflect on our collective ambition to elevate Nigeria into a $1 trillion economy. The Central Bank of Nigeria has been working assiduously to stabilize the economy, working through Monetary policy to tame inflation and rebuild the confidence of the Nigerian people in its economy.

“Nigeria, as Africa’s most populous country, continues to pursue sustained and inclusive economic growth. One of the most pressing challenges with this mandate is the integration of more citizens into the formal financial system. Financial inclusion is not a peripheral issue; it is central to achieving broad-based economic growth. Economically, financial inclusion impacts poverty reduction, income equality, employment generation, and overall productivity.

“When more people have access to formal financial services, they are better able to save, invest, and contribute to the economy. This participation ensures efficient capital allocation, fosters innovation, and builds a more resilient economy.

“In its simplest form, Financial Inclusion ensures that people have access to bank accounts, credit, savings, and other essential services. However, its implications for national development are far-reaching. In Nigeria, the 2023 EFInA Access to Finance survey reveals that 26% of the adult population remains financially excluded. This statistic highlights a critical challenge: almost one-third of Nigerians cannot access capital to grow businesses, secure savings for the future, or obtain insurance to mitigate risks. The absence of these services traps individuals in cycles of poverty and stunts national economic expansion.

“Widespread access to financial services is an enabler of economic activity. Micro, small, and medium enterprises (MSMEs) which are the backbone of Nigeria’s economy can thrive with improved access to credit, creating jobs and boosting productivity. Moreover, as more Nigerians can save, and invest in education, healthcare, and housing, their quality of life improves, fostering broader economic development. Financial inclusion unlocks untapped potential, making it a vital instrument for national progress.

“It is in recognition of this, that the CBN has been a steadfast advocate for financial inclusion, due to its critical role in achieving macroeconomic stability. Since the launch of the National Financial Inclusion Strategy (NFIS) in 2012, the CBN in collaboration with partner agencies has championed policies and initiatives to reduce financial exclusion. These initiatives have been guided by the vision of ensuring every Nigerian has access to affordable financial services, from basic savings accounts to micro pension and microinsurance offered by other regulated non-bank financial institutions to digital payment platforms,” Cardoso explained.

He noted that thee CBN is keen on ensuring its Financial Inclusion policies and initiatives address the peculiar access to finance barriers for underserved populations, particularly Women, Youth, and MSMEs.

“The importance of this mission cannot be overstated, as I have reiterated that financial inclusion is foundational to Nigeria’s sustainable economic development.

“In line with its efforts to deepen financial inclusion, the CBN recently introduced new minimum capital requirements for banks. This strategic move ensures that banks are well-capitalized, enabling them to take on greater risks, particularly in underserved markets. With stronger capital bases, banks can provide more loans and financial products to MSMEs, rural communities, and other vulnerable segments that have previously struggled to access formal financial services.

“This policy not only strengthens financial stability but also serves as a catalyst for inclusive growth. By enabling banks to extend more credit to MSMEs, we enhance job creation and productivity. Furthermore, with increased capital, banks can invest in technology and innovation, crucial for driving digital financial services such as mobile money and agent banking. These technologies are key to breaking down geographic and economic barriers, bringing financial services to even the most remote areas,” he added.