From Financial Inclusion to Financial Involvement: Nigeria's Path to Lasting Prosperity

Nigeria stands on the brink of transformative growth, with its population positioned to become one of Africa’s most significant economic assets. However, unlocking this potential and ensuring widespread prosperity requires Nigeria to move beyond the traditional concept of financial inclusion. The next crucial step is to embrace financial involvement—a stage where citizens are not just granted access to financial services, but are empowered to actively engage with these services for wealth creation, economic security, and long-term growth.

The Shift from Financial Inclusion to Financial Involvement

For years, financial inclusion has been regarded as a pivotal driver of economic development, poverty alleviation, and social integration. It has widened access to basic financial services, such as savings accounts, mobile money, and payments, thus bringing more people into the formal economy. However, to accelerate poverty reduction, decrease inequality, and create broader economic opportunities, we must shift our focus to financial involvement. This new phase is not just about access; it is about providing individuals and businesses with the tools, knowledge, and opportunities to fully engage with the financial system and succeed.

Financial involvement represents the advanced stage of financial inclusion, where the focus moves from simple access to active and meaningful participation in the financial system. While financial inclusion works to expand access to services like bank accounts and mobile payments, financial involvement leverages the gains of inclusion by using the data and insights from those efforts to enhance user experiences. Instead of focusing solely on traditional metrics—such as the number of accounts opened or demographic coverage—financial involvement digs deeper, understanding how people use financial products and how those products improve their financial well-being.

Leveraging Data to Enhance Financial Experiences

Data gathered through financial inclusion initiatives provides a wealth of insights into customer behaviours, needs, and preferences. By analyzing transaction patterns, spending habits, and savings behaviours, financial institutions can design personalized solutions that help users better manage their finances, access credit more efficiently, invest wisely, and mitigate risks through insurance. This enables financial providers to offer products that not only increase security but also drive wealth creation and economic empowerment.

Financial involvement is about the user experience—moving beyond simply opening accounts to ensuring that users are actively engaged with financial services. For instance, instead of measuring success based on the number of new accounts, financial involvement assesses whether those accounts are being used to save regularly, access loans, invest, or manage risks. It’s a holistic approach that prioritizes financial literacy, trust-building, and access to more sophisticated products like credit, insurance, and investments.

Barriers to Financial Involvement

Despite significant progress, barriers to financial involvement remain. Many of the challenges that impede financial inclusion—such as low incomes, insufficient financial literacy, a lack of trust in financial institutions, high transaction costs, and inadequate infrastructure—also hinder financial involvement. These obstacles are particularly pronounced in rural communities, among women, youth, and MSMEs (micro, small, and medium enterprises). However, the key to overcoming these challenges lies in leveraging technology, which has already transformed financial services in many emerging markets.

In Nigeria, mobile penetration rates continue to improve, with 172 million mobile subscribers, representing an 87% penetration rate (MCP Insight). Digital solutions such as Agency Banking, mobile money, and fintech innovations have opened doors to previously underserved populations. However, to deepen financial involvement, individuals and businesses must be able to actively use financial products like credit, insurance, investments, and pensions to generate sustainable economic value.

Technology as a Catalyst for Financial Involvement

Digital financial services (DFS) offer a powerful pathway toward financial involvement. Platforms like LOTUSmart by LOTUS Bank, Moniepoint, OPay, and PalmPay are already driving innovation and competition in Nigeria’s financial sector, making services more accessible and cost-effective. However, there remains a need for targeted solutions tailored to Nigeria’s unique socio-economic context.

Imagine a future where financial literacy programs are delivered through mobile platforms in local languages, enabling rural populations to make informed financial decisions. Or envision a scenario where contactless payment systems like NQR and others become the standard nationwide, providing seamless, cashless payments for everyone, from bus drivers to market vendors in remote areas.

Expanding the Financial Ecosystem

Financial involvement is not just about increasing the number of bank accounts; it’s about creating an ecosystem where individuals and businesses can thrive. This involves offering advanced financial products like micro-loans, insurance, savings, and investments to all segments of society. For MSMEs, which form the backbone of Nigeria’s economy, access to credit and other financial services is critical for fostering growth and innovation.

Furthermore, it is essential to address the needs of marginalized groups. Women entrepreneurs, who often face greater barriers to accessing capital, must be included in this vision of financial involvement. Tailored microcredit schemes for women-owned businesses or digital platforms that provide financial management tools can play a key role in levelling the playing field.

A Supportive Regulatory Framework

To fully realize the potential of financial involvement, regulatory support is vital. The Nigerian government and regulators must create an environment that promotes innovation while safeguarding consumer protection. Clear regulations that encourage competition, ensure data privacy, and protect consumers are essential for fostering trust in the financial system.

Collaboration between the public and private sectors, fintech companies, civil society, and financial institutions will be key to achieving this goal. As the African proverb says, “A river grows strong from the many streams that feed it.” No single institution or sector can drive financial involvement alone—success will come from working together to ensure that financial services are inclusive, accessible, and impactful for all Nigerians.

The Future of Financial Involvement in Nigeria

Unlocking prosperity in Nigeria requires a dual approach: expanding financial inclusion and deepening financial involvement. It’s not enough to simply provide access to financial services—people must be empowered to use them effectively to improve their livelihoods. Financial involvement offers a path to sustainable growth by equipping citizens with the tools they need to create wealth, build resilience, and contribute meaningfully to the economy.

Nigeria’s journey to becoming a leading African economy in the 21st century hinges on its ability to harness the power of digital financial services, invest in human capital, and foster an environment conducive to financial innovation. By embracing financial involvement, Nigeria can unlock its untapped potential, transform lives, and achieve lasting prosperity for all its citizens.

In summary, financial involvement is the next frontier for Nigeria’s economic growth, taking financial inclusion to the next level. This shift focuses on leveraging data, enhancing user experiences, and fostering a financial ecosystem that empowers individuals to actively engage in their financial growth. By prioritizing financial involvement, Nigeria can pave the way for a more prosperous, inclusive, and resilient economy for all.