Impact of Nigeria's recession on financial inclusion

Amidst Nigeria's aim to reduce the number of unbanked population by 20% in 2020, the country finds itself facing a challenging economic landscape marked by a recession. CNBC Africa's Wally Farmer Oa recently spoke with Kayode Olubiyi, Head of Financial Inclusion at Diamond Bank, to analyze the potential impact of the recession on Nigeria's financial inclusion drive. Olubiyi delved into the repercussions of the recession on financial inclusion from various perspectives, primarily focusing on customers and the bank itself. The first perspective highlighted was that of the customers, who can be broadly categorized into salary earners and small business owners. Salary earners who receive funds through transfers are facing a decline in purchasing power due to the subdued economic environment. This impacts their ability to save, thereby limiting their access to credit facilities based on their savings history. Similarly, small business owners are experiencing reduced revenue streams and altered consumer behavior patterns, resulting in significant economic challenges. Furthermore, Olubiyi shed light on the impact of the recession on the bank as a financial institution. Diamond Bank, like other financial entities, is grappling with rising operational costs and reduced investment capacities due to the downturn. Despite these challenges, Diamond Bank remains committed to promoting financial inclusion by encouraging customers to save through various channels. However, amidst the economic turmoil, Olubiyi emphasized the significance of viewing the recession as an opportunity for strategic investments. He underscored the importance of sustaining efforts towards financial inclusion to ensure long-term benefits for both customers and the economy as a whole. With the Central Bank of Nigeria setting ambitious targets for financial institutions to enhance financial inclusion, Olubiyi stressed the importance of staying the course and leveraging the current economic environment to drive positive change. In conclusion, Olubiyi reiterated that financial inclusion is a long-term investment that transcends economic cycles. While the recession poses immediate challenges, the commitment of financial institutions and regulatory bodies to the cause of financial inclusion is crucial in navigating the current economic downturn and paving the way for future growth and prosperity.