Experts have charged the Central Bank of Nigeria to create a monetary policy environment that fosters financial inclusion, improves access to credit by Small and Medium Enterprises to drive economic growth and grow the middle class at the International Financial Inclusion Conference, Tuesday. Representatives of the Central Bank of Nigeria and National Assembly at the conference held divergent views about what kind of policy process engages all stakeholders and who these stakeholders really are.
Musa Itopa Jimoh, Deputy Director, Banking & Payments System at the Central Bank of Nigeria, contended that the CBN engages stakeholders in the process of formulating all its policies “there is no regulation that comes from the CBN without first consulting other stakeholders. Thus, the CBN is transparent.” John added that the CBN is well aware that change is constant and Nigeria’s monetary authority will not stick with a rigid regulation when there is a need for changes to deepen financial inclusion. In response, Jones Onyereri, chairman, house committee on Banking and Currency disagreed stating that the CBN does not consult broadly enough.
READ ALSO: 9PSB operations to deepen financial inclusion
“We were never consulted and even if we were, the National Assembly will never agree to a 14 per cent Monetary Policy Rate (MPR) as we cannot run the economy with a two-digit interest rate. Our role is to set up a legal framework that will help balance all regulations in the economy targeted especially at SMEs to assist them to get access to credit facilities at an affordable interest rate” Onyereri said. The greatest beneficiaries of appropriate financial inclusion policies are the Small and Medium Enterprises (SMEs) because they grow the middle class, which is practically nonexistent in Nigeria. You are either rich or poor, Onyereri added.
Experts and business owners are desirous of seeing micro, small and medium enterprises perform optimally. They add that if certain steps are taken, 37 million SMEs can make more than 47 per cent of the gross domestic product (GDP), creating jobs.
Nigeria’s small businesses currently contribute 47 percent to the GDP, but are currently beset by a number of challenges that have pulled them back. Last year, 222 of them shut down due to monetary policy issues and instability in the economy. Frank Aigbogun, publisher and CEO of BusinessDay in his opening speech emphasised the need to see financial inclusion as a tool for development in Nigeria and tasked the regulators to play the role required of them in ensuring an enabling policy environment.
READ ALSO: CBN holds monetary policy rate at 13.5%
The CBN has raised held the Monetary Policy Rate (MPR) constant, which is the benchmark for the interest rate in the country, from 12 to 14 per cent. Usually, banks respond to MPR changes, according to experts. With excessively high rates at deposit money bank, experts say SMEs could suffer unless the Bank of Industry is recapitalised or more development banks established. Banks charge rates ranging between 20 and 35 per cent.
“Policies are good but we need to put the consumers at the centre of all our programmes as this is the only way that they policy can have a significant impact,” said Modupe Ladipo, Board Chairman, EfinA Ltd.
Financial inclusion is a fundamental part of our development agenda. We work with about 800 companies globally and committed to about $60 billion investment fund said Lori Cambe Open, Program Lead for Responsible Finance, IFC Microfinance & Digital Financial Services.
Participants at the event harped on the need for massive effort to educate the consumers to carry them along and deepen financial inclusion.
Technology plays a great role in levelling the playground and guaranteeing a wide spread of financial inclusion. The mobile money in Kenya is a model that continues to work and deliver on its promise.
“We discovered not having enough touch points across the country was a major problem so we said to ourselves, we are not a bank or a mobile money operator but can we build a network that would serve all touch points in every ward of every local government” Mike Ogbalu, CEO Interswitch to BusinessDay in an exclusive interview.
STEPHEN ONYEKWELU, MIKE ANI and DIPO OLADEINDE
