by Rose Okenwa, Business Analyst
What is financial inclusion?
Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meets their needs, including transactions, payments, savings, credit and insurance. It has further been identified as an enabler of 7 of the 17 SDG Goals and the key enabler to reduce extreme poverty and boost shared prosperity (World Bank).
It plays a crucial role in human development and its impact is felt across the world. For Africans living in diaspora, financial inclusion holds a special significance in supporting their communities back in Africa.
What does financial inclusion mean to me?
As an African mother living in the United Kingdom, financial inclusion for me means access to financial services that are safe, reliable, affordable and sustainable. This includes access to a transactions account, savings for my children and emergencies, loan services, insurance to help manage and mitigate risks, and other financial products that are critical to achieving financial stability and security. It also enables me to remit money to my family and loved ones in Nigeria, providing a crucial source of support for them.
Many people in Africa, particularly those in rural areas, lack access to basic financial services, such as savings accounts and loans. Financial inclusion initiatives, such as mobile banking and digital finance, have helped to address this issue by bringing financial services to communities that were previously underserved.
What's next?
How do we ensure inclusive finance for the communities facing barriers such as lack of accredited identification, minimum deposits, and credit scores to access loans?
How do I make the funds remitted to my loved ones reach them at a time when cash is not available?
How do we make it possible for the rural merchant or farmer to make a sale when the masses have no access to cash to purchase goods?
A technological solution, like an L20 QR key, can be issued to verified individuals and give them access to funds and services, such as education and healthcare, with just a tap. Financial literacy is also a crucial part of financial inclusion. By providing access to financial services, individuals are given the tools and resources they need to better understand how to manage their finances and make informed financial decisions. This includes learning how to save money, invest, and manage debt, all of which are critical skills that are essential for achieving financial stability and security.
In conclusion, financial inclusion can have a profound impact on the financial wellbeing of individuals and communities in Nigeria, allowing them to build a secure financial future and support their communities.