•Says there’s need to revamp NFIS
By Henry Uche, [email protected]
As part of measures to address Nigeria’s financial inclusion gap and get more working age adults to have seamless access to credit, savings, payments and insurance from formal providers, the National Insurance Commission (NAICOM) has called on the Central Bank of Nigeria, (CBN) the National Pension Commission, (PenCom)Nigerian Communications Commission (NCC) and Securities and Exchange Commission (SEC) to fully embrace technology to serve this purpose.
In his remarks, the commissioner for insurance, Mr. Sunday Thomas, who spoke at a fintech conference recently, said financial inclusion has assumed a critical development policy priority in Nigeria with the National Financial Inclusion Strategy (NFIS) which aimed at reducing the exclusion gap to 20 percent at the end of 2020. Looking at the ‘Imperative of Fintech in Promoting Financial Inclusion in Nigeria’ the commissioner said that Nigeria may not reach the NFIS target until 2030, following data provided by EFIna from its survey on ‘Access to Financial Services in Nigeria’ which revealed that the number of persons financially excluded has reduced from 52.2 percent (45.5m) in 2008 to 36 percent (38m) in 2020.
According to him, pressing concerns regarding financial inclusion gap include, whether the existing fintech/insurtech business models and products are suitable and sustainable for the unbanked and why the Nigerian financial inclusion rate is lower than that of some other developing countries despite numerous programmes.
“It appears that NFIS, fintech, insuretech and current financial services have their shortcomings to the group of people we claim to provide for, there is therefore the need to revamp NFIS to capture current realities and come up with new strategies to navigate through certain concerns or challenges.
“There have been certain challenges that have in recent times stifled the NFIS goal; these include financial literacy levels in the rural areas, payment system laws and lack of collaboration between various stakeholders and even regulators.
Thomas called on the CBN, PENCOM, NCC and SEC to create open and level playing field for a wide range of providers, increase collaboration between themselves including NAICOM to create the right environment for technology to thrive, as well as encourage innovation around product, services and delivery channels.
“The journey to financial inclusion goals can only be speed up if we encourage the scaling of technology particularly mobile money.
Research has shown that phone ownership in Nigeria has increased with at least one person in a household owning a mobile phone according to EFina 2018 survey.
“We must support projects to improve data and technical expertise, encourage collaboration and information exchange between various stakeholders, review primary laws and regulation and put in place necessary safeguards.
“As a subset of the financial services industry, the insurance industry has a responsibility to guarantee the sustainability of growth and development of the economy and we consider technology as a key driver for market development.
“It is in furtherance of this that the commission has invested heavily in automating its processes as well as facilitated the space for financial inclusion growth in the industry. This is in order to accelerate the Insur-Tech eco-system,” he said.
The NAICOM chief therefore urged them to consider tech as good disruptor, saying, “Technology as a disruptor when considered in relation to cloud computing, mobile computing, AI, blockchain tech, IoT, data analytics, usage based insurance (PAYD, PHYD) using telematics, is the new market platform. Telematic for instance has been identified to be disrupting the insurance sector by basically altering how risks are evaluated and premiums defined,” he said.
He added that the future of fintech started yesterday with InsurTech at hand, and NAICOM hopes that there would be a re- energisation of national inclusion policy that fully meets stakeholders needs which is to strengthen inclusion for the unbanked or under banked segments.
“Financial Inclusion researches/data has shown that its nature, form and challenges differs among countries and cannot be addressed with a single product or one size fits all approach.
“We should therefore implement technology initiatives that takes into consideration the peculiarities of the Nigerian environment and most critically the local people” he advised .