Central Bank of Nigeria Governor Olayemi Cardoso announced that the new capital requirement for banks will boost their capacity to drive financial inclusion. Speaking at the International Financial Inclusion Conference in Lagos, Cardoso explained that this move ensures banks are well-capitalized, enabling them to take on greater risk in underserved markets.
Key Benefits of the New Capital Requirement:
- Increased lending to MSMEs and rural communities: With a stronger capital base, banks can provide more loans and financial products to vulnerable segments that have struggled to access formal financial services.
- Job creation and productivity: Extending more credit to MSMEs enhances job creation and productivity.
- Digital financial services: Increased capital allows banks to invest in technology and innovation, driving digital financial services like mobile money and agent banking.
Cardoso emphasized that financial inclusion has the potential to unlock significant economic growth, particularly through empowering SMEs, women, and other vulnerable segments. SMEs account for over 80% of employment in Nigeria, yet many struggle to access credit. Financial inclusion for SMEs is crucial to unlocking the sector’s full potential.
Promoting Financial Inclusion for Women and Youth:
The Central Bank of Nigeria has made significant strides in promoting financial inclusion for women and youth through frameworks aimed at closing gender gaps and regulatory support for digital platforms.
Nigeria’s Progress in Financial Inclusion:
Nigeria’s financially included population rose from 68% in 2020 to 74% in 2023, according to Enhancing Financial Innovation and Access. This progress demonstrates the effectiveness of initiatives aimed at deepening financial inclusion.
