2020: FSS, CBN Targets 63m savings —–with initial target of 39millon users of savings product by 2015

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2020: FSS, CBN Targets 63m savings
—–with initial target of 39millon users of savings product by 2015
By Benjamin A Ameh
A year set aside by the national economy team to reach 20 top positions in the world was also marked as part of national financial inclusion strategy; the central bank of Nigeria CBN is targeting to achieve a total number of 63 million users of bank savings account by 2020 from 31 million it was in 2011
The apex bank which plans to achieve this target in conjunction with the commercial and microfinance banks MFBs, pointed out that the target required a 12 percent compound annual growth rate CAGR from 2011 to 2020.
These targets formed part of the CBN’s “National Financial Inclusion Strategy” posted on its website. The regulator had set an initial target of 39 million users of savings product by 2015.
It added, “A significant burden on increasing savings is the current Know Your-Customers KYC requirements for opening and maintaining bank accounts. These issues must be addressed “To support the target picture for financial inclusion in 2020, the number of bank branches will need to increase from 5,797 in 2010 to 10, 000 in 2020. The number of Automated Teller Machines (ATMs) will need to increase from 9, 958 to 62, 440 and the number of Point Of Sale (POS) device from 11, 223 to 40, 000. A mobile agent network of 65, 000 agents will also be required by 2020”
The CBN, however, expressed concerned over the low credit permission in the country with only 2 percent access to formal credit, citing Tanzania with 16 percent and South Africa with 32percent as good trends.
“With its 15 loan accounts at commercial banks per 1000 people, and Nigeria poles in comparison with Malaysia which has 93 loan accounts by 1000 people outside South Africa, where insurance penetration is 30 percent, insurance in Africa is relatively low.
“However, Nigeria’s insurance sector performs poorly even compared to its Africa peer, with just I per cent penetration. Poor insurance literacy and a lack of trust are considered the major factors keeping the use of insurance in Nigeria low. Significant intervention is required in order to reverse the current trend”, it revealed.
The 117-page document which was prepared by the Roland Berger Strategy consultant team outlined the branch model, retail agent led model, mobile payment led model and the client empowerment model, as some of the strategies it intends to use to achieve its 2020 financial inclusion targets.
The report stated, “The Branch model is the model of banking that exists in Nigeria today. It relies on traditional bricks-and-mortar branches as the dominant channel for delivering banking services.
“The preferred model is a combination of all five models. It leverages existing global best practices to increase financial inclusion to target levels. It focuses on technology–driven, low cost channels that can be deployed easily to ensure that access is significantly increased in a way that is profitable for both the providers of financial services and end users.
“The preferred model would require 4,100 branches, 3,400 mini-branches, 51, 800 ATMs, 122,000 retail agents and 55,200 mobile agents.”


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