The definition of financial inclusion which goes thus: “Financial inclusion is achieved when all adult population have easy access to a broad range of formal financial services that meet their needs at affordable cost,” is the test barometer indicating where a nation stands within the broad spectrum of this.
In 2011, a summit of financial regulators, Maya Declaration 2011, known as the Alliance for Financial Inclusion AFI signed a declaration to amongst others to, “implement a sound and appropriate regulatory framework that balances the goals of financial inclusion, integrity and stability of their respective financial system,” categorically opening the vent for nations to domesticate the road map to achieve FI; and these services include but not limited to payments, savings, loans, insurance and pension products.
The following year, 2012, the federal government through the CBN launched the National Financial Inclusion Strategy 2012, first, to significantly increase both access to and use of financial services by the year 2020; endorse stakeholders inputs; and, outline the framework for increasing the formal use of financial services by the adult population to 80% by 2020 from the level of 36% in 2012.
With the federal blueprint set, the National Insurance Commission, adopted the tag team of Takaful and Micro Insurance, the watershed and home for the financial excluded. With strong foundation already laid by various studies funded by international agencies, the Commission was prepared for the take off to implement Financial Inclusion for the insurance industry creating a new and compelling offering.
NAICOM, fluid with emission of steam of preparedness is upbeat about the state of financial inclusion and is already projecting “positive look for both takaful and Micro Insurance going forward.
The upward movement is encased in the market development and enforcement of compulsory insurance drive embarked by the commission “is expected to improve the uptake of takaful and Microinsurance as well.”
However, as the regulator holds up the banner of FI strategic compliance, just steps away are challenges knocking down hedge stones on the way, and they show up severally as, lack of proper understanding of both concepts by the operators and consumers as well, poor public awareness and, lack of skill man power.
NAICOM says that with five Takaful operators and four micro insurance companies, two approved and two approved in principle, Nigeria is on the match to improve the commitment along side The G20 countries to improve access to financial services by reaching out to low income (via micro finance /microinsurance/micropension) and the segregated or underserved (via alternative financing institutions such as non-interest financial institution non-interest banks, Takaful companies etc.)