NAICOM seeks technology promotion to bridge Nigeria’s financial inclusion gap
By Cynthia Ezekwe
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 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
Sunday Thomas, the commissioner for insurance, made the call at a fintech conference held recently in Abuja.
Citing data by EFIna, a financial sector development organisation that promotes inclusive finance in Nigeria, Thomas noted that the number of persons financially excluded has reduced from 52.2 per cent, which is about 45.5 million in 2008 to 36 per cent, which is about 38 million in 2020.
The commissioner for insurance stated that based on this trajectory, Nigeria may not reach the National Financial Inclusion Strategy (NFIS) target, aimed at reducing the exclusion gap to 20 per cent at the end of 2020, until 2030.
According to him, pressing concerns regarding financial inclusion gap includes the suitability and sustainability of existing fintech/insurtech business models and products for the unbanked and why the Nigerian financial inclusion rate is lower than that of some other developing countries despite numerous programmes.
The commissioner noted that there is an urgent need to revamp NFIS to capture current realities and come up with new strategies to navigate through certain concerns or challenges., so that the financial inclusion will be achieved to a great extent.
“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 said.
He therefore called on the CBN, PENCOM, NCC and SEC to create an open and level playing field for a wide range of providers, increase collaboration between themselves, and 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 sped up if we encourage the scaling of technology, particularly mobile money,’’ Thomas added.
Thomas emphasised that insurance being the subset of the financial services industry, has a responsibility to guarantee the sustainability of growth and development of the economy. He stated that NAICOM considers technology a key driver for market development, adding that the commission has invested heavily in automating its processes as well as facilitated the space for financial inclusion growth in the industry, in order to accelerate the insurtech ecosystem.
He also urged financial organisations to implement technology initiatives that takes into consideration the peculiarities of the Nigerian environment and most critically the local people, to strengthen inclusion for the unbanked or under banked segments.
Thomas concluded that technology as a disruptor when considered in relation to cloud computing, mobile computing, AI, blockchain tech, IoT, data analytics, usage based insurance, is the new market platform for the insurance sector.