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NAICOM to Actualize 80% Financial Inclusion Target by 2021

By Tony Obiechina, Abuja

The National Insurance Commission (NAICOM) has said that part of its strategy to meet the 80 per cent insurance industry’s financial inclusion target by 2021 was stakeholder engagements, workshops and sensitization programmes aimed at meeting insurance industry’s Financial Inclusion target.

The agency’s Head of Takaful Insurance, Zubairu Darazo, said this when he made a presentation at the industry event in Uyo, Akwa Ibom State recently on ‘Insurance Development in Nigeria; the Financial Inclusion Option.
Darazo said that Financial inclusion would be achieved when all adult population have easy access to a broad range of formal financial services that meet their needs at affordable cost.

He explained that financial inclusion services include but are not limited to payments, savings, loans, insurance and pension products and NAICOM projects have positive outlook for both Takaful and Micro-insurance going forward, adding that the market development and enforcement of compulsory insurance drive embarked upon by  the Commission is expected to improve the uptake of Takaful and Microinsurance as well.

He explained that federal government through the Central Bank of Nigeria (CBN) launched the National Financial Inclusion Strategy 2012 “to ensure that a clear agenda is set to significantly increase both access to and use of financial services by the year 2020, to ensure that the concerns and inputs of all stakeholders are considered and roles and responsibilities are defined before regulations and policies are set for Financial Inclusion, 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 and ensure different targets are set for each component of different sectors of the financial system. Insurance industry target was also set at achieving 40% penetration amongst adult population by the year 2020 (from 1% in 2010).”

According to him, financial inclusion intended to achieve “ease of access to financial products and services and ensure financial products must be within easy reach for all groups of people and should avoid onerous requirements.

Financial inclusion implies not only access but usage of a full spectrum of financial services including but not limited to payments, savings, credit, insurance and pension products designed according to the need of the customers. Financial products and services must be designed to meet the needs of clients and should consider income levels and access to distribution channels at affordable cost.”

He identified the strategy’s challenges as “lack of proper understanding of both concepts by the operators and consumers, poor public awareness and lack of skilled man power,” adding that these have necessitated the planned stakeholder engagements.

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