CBN Launches Payment Service Bank Initiative for Financial Inclusion

The Central Bank of Nigeria (CBN) has launched a Payment Service Bank initiative aimed at achieving 95% financial inclusion in the country by 2025. The initiative involves licensing Payment Service Banks to provide digital banking services and agent networks, particularly in rural areas that have traditionally been underserved by conventional banks.

Increasing financial inclusion can have a profound impact on poverty reduction and economic growth, as it enables individuals and businesses to access credit, savings, and other financial services that can improve their livelihoods. By achieving 95% financial inclusion, Nigeria can unlock the economic potential of its vast population and reduce income inequality.

One of the early movers in this space is Moneymaster Payment Service Bank, which has already begun operations and is partnering with various organizations to expand its reach. Moneymaster has teamed up with the Lagos State government's 'Ounje Eko' food market program to provide financial services to market participants and customers.

The Payment Service Bank model is designed to leverage technology and agent networks to bring basic banking services closer to the people, especially in areas where traditional bank branches are scarce. These services include account opening, cash deposits and withdrawals, funds transfer, bill payments, and more.

Why this matters: Nigeria has a large unbanked and underbanked population, with millions of people lacking access to formal financial services. This hampers economic growth and perpetuates poverty and inequality. The CBN's Payment Service Bank initiative is a key part of its National Financial Inclusion Strategy, which seeks to address this challenge.

Other players in Nigeria's banking sector are also taking steps to promote financial inclusion. Wema Bank, for instance, has been a leader in this regard, launching innovative solutions such as its digital bank ALAT, *945# USSD banking service, and extensive agency banking network to reach the unbanked and underserved.

The CBN's target of 95% financial inclusion by 2025 is an ambitious one, but with the concerted efforts of regulators, financial institutions, fintech companies, and other stakeholders, it is achievable. The successful implementation of thePayment Service Bank modelwill be crucial in this journey, bringing millions of Nigerians into the formal financial system and unlocking the country's economic potential.

Key Takeaways

• CBN launches Payment Service Bank initiative to achieve 95% financial inclusion in Nigeria by 2025.
• Increasing financial inclusion can reduce poverty and income inequality, and boost economic growth.
• Moneymaster Payment Service Bank is one of the early movers, partnering with Lagos State government to expand reach.
• Payment Service Bank model leverages technology and agent networks to bring basic banking services to underserved areas.
• CBN's target of 95% financial inclusion by 2025 is ambitious, but achievable with concerted efforts from stakeholders.