60 per cent of Nigerians don’t have access to funds ― NDIC boss

Osaretin Osadebmwen/Taiwo Amodu - Abuja

Not less than 60 per cent of the Nigerian population is grappling with the challenge of access to finance, Managing Director and Chief Executive Officer of the Nigerian Deposit Insurance Corporation, (NDIC) Umar Ibrahim has said.

Ibrahim was speaking against the background of limited access to fund and economic inclusion for all Nigerians pointing out that the nation’s economy is facing challenges that can be overcome by expanded access to such fund by the population for business purposes.

The NDIC chief executive was at the office of the President of the Senate, Ahmed Lawan to seek the cooperation of the Senate on her mandate to ensure banks and financial institutions in the country.

Ibrahim said the NDIC is striving to ensure a stable banking system with reliable cybersecurity system to minimise and possibly contain cyber crime which has become prevalent.

He said: “We are aware of the challenges that the economy is facing and we are aware of the fact that we cannot have a virile economy without having a stable banking system and that is why we at the NDIC continue to partner with CBN and other stakeholders to ensure that we continue to have effective supervision and regulation of the banking system. Banking system globally is dynamic, it has its challenges and this is more so in this country.

“Only recently or few days ago the CBN rolled out its policy going forward in the next five years which is anchored on the strengthening of the Nigerian economy, the diversification of the economy through agriculture in particular, achieving as much as possible single digits inflation, and ensuring that more and more Nigerians are involved to have access to financial services and on top of that the economy grows and achieve job creation and reduction of poverty.

“We subscribe to that and our contribution in this regard is to ensure that we effectively supervise the banking system.”

He also pointed out that in carrying out its supervisory role in the economy, the NDIC has observed some challenges confronting the banking sector.

“In the last few years we have battled with the emergence of non-performing loans, we have battled with issues relating to Corporate Governance in banks, we have battled with issues that have to do with risk management and consumer protection.

“All these are issues that confront supervisors of financial services industry globally. These are on the agenda of financial services regulation and coordination committee.

“This is a committee that comprises the CBN, NDIC, the Pension Commission and the Securities and Exchange Commission as well as the Insurance Commission. As I said the issue of financial inclusion is very critical globally, we have a lot of statistics that indicate clearly that about 60% of Nigerians do not have access to finance.

“People travel for hundreds of kilometres before they can reach a branch. There are local Government and communities that do not have a branch, they do not have ATM machines, they have nothing and you cannot achieve those without some kind of sustainable financial inclusion.

“We are working hard to ensure that the situation is changed. Nigeria has signed ombudsman to eradicate or to eliminate the problem of access to finance otherwise to achieve more financial inclusion for its citizenry.

“Happily measures have been taken to ensure that we gain more mileage in this area by way of establishing more microfinance banks, licensing mobile banks, creation of agents banks and now the CBN is trying to license what is referred to as Payment Service Banks, all these are with a view to enlarging the space so that the teeming population of Nigerians would have access to banks and access to financial inclusion speaks not only to somebody walking into a bank or using his phone to make transactions but also allowing the citizen to be able to access information, get help, get small loan in a very responsive and responsible manner so that he or she can be able to have a sustainable livelihood and his business.

“We are working very hard to achieve that. Issues that pertain to fraud and forgery in the baking space also engaged our minds especially cyber crimes. We are working hard with the office of the Nigeria Bar Association and all other stakeholders to minimize incidences of cybercrime in our banking system.

“The banks are being encouraged to ensure that they have full proof cybersecurity system so as to minimize the incidences of hacking which results in serious loses to the banking system and loss of earnings and loss of confidence. ”

The NDIC boss equally shared some new developments in the global arena which can impact the local economy and banking system

According to him, “Part of the emerging trends globally in the banking space is the emergence of block chains technology and cryptocurrency. Cryptocurrency is one example of blockchain technology. These are new innovations that do distract the traditional banking system.

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“We have an emergence of these institutions even here in Nigeria. These are institutions that do not lend and are deposit-taking, they are not insured yet because of technology and because of teeming young people who are technology savvy you can not stop this phenomenon.

“The best that any regulator or any provider can do in this circumstance is to study the phenomenon, see how it can be incorporated into the entire system and supervised so that again you protect depositors money and protect the economy, otherwise these are unstoppable emerging trends globally. For us all of these mean that we have to sharpen our skills, we have to develop ourselves, we have to collaborate with one another so that we can achieve all of these.”

He also sought legislative intervention to improve their operations, pointing out that the legislative measure to react the NDIC Act failed because it was not passed in the Senate in spite of its passage in the House of Representatives.

Responding, Senator Lawan pledged the support of the Senate to the Corporation.

He also said it was important to explore the mechanism that will make access to fund available to poor farmers who may not have collateral but are genuinely interested in agriculture especially as it has been accepted by all and sundry that the national economy must be diversified to perform better and work for the people.

According to Lawan, the money bags could provide low-interest loan to the peasant farmers as a measure to mitigate the challenge.

“The Senate and indeed the national assembly will start to work on the NDIC Act. You know that the last efforts expired with the expiration of the eighth National Assembly.

“It is important that we start working on it immediately our committee are in place and we will do that. I want to assure you that we will have a committee that will be working with you very closely.

“In the Nigerian economy you have a role to play in that economy and for us we would want to achieve an economy where Nigerian is at advantage and Nigerians get equal doses of opportunity. those at the very lowest of the ladder of society, those that are particularly advantaged given opportunities that ordinarily will not be available, this administration will want to emphasise

“Particularly, the banks hardly provide facilities for agricultural produce but due to other projects, that is a big problem, on one hand as a government we want to diversify, we want to encourage agriculture.

“The facilities are not easily met and where they are available the interest rates are out of the roof. This is enough to discourage our people, farmers particularly to go for banking facility and that will definitely undermine every positive effort.

“The Central Bank of Nigeria embarked on this Anchor Borrowers Programme but we want to see our commercial banks or money bags also provide facilities at affordable interest rates so that our teeming farmers who are willing to go back to the land can access those facilities easily.

“Let me at this juncture refer to the Nigerian Agricultural Insurance corporation I think should be properly funded because when you are asking people to go back to land, for agricultural activities.

“We must also ensure that they are protected from the vagaries of the weather and other unforeseen fatalities that could happen. Therefore, the Agricultural Insurance Corporation needs to be well funded and be at its best.

“I have no idea how it is funded but I believe that in the past it was funded, I know that it has not been able to provide for the farmers that it is mandated to provide.

We have to work together to proved facility and opportunities for not only the moneybags but to the those who are also disadvantaged, those peasant farmers who are also disadvantaged, unfortunately, they don’t have collateral, we have to encourage them we have to empower them.

“This country needs not only to achieve food security but also have the security of property and lives until we are able to get some people do something especially through agriculture where people can easily key in, Nigeria will continue to experience insecurity as it is today.