Digital insurance key in achieving financial inclusion – NDIC

The Managing Director of the Nigeria Deposit Insurance Corporation, Umaru Ibrahim has identified digital insurance as key in improving financial inclusion in the country.

The managing directory stated this at the closing of the 16th edition of workshop for business editors and Finance Correspondents Association of Nigeria (FICAN).

He said the commission’s stride to improve the digital space led to it’s collaboration with he Korean Deposit Insurance.

“In August 2019, the Corporation signed a Memorandum of Understanding (MOU) on experience sharing and capacity building with the Korean Deposit Insurance Corporation (KDIC) and the Taiwan Central Deposit Insurance Corporation to further deepen the implementation of the DIS in Nigeria. The MOU also aims to enhance our capacity to understand and supervise the FINTECH and the Digital currencies phenomenon. FINTECH and Digital currencies are not only witnessing rapid deployment globally but also locally in Nigeria.

“The Corporation also extended DIS coverage to Micro Finance Banks (MFBs) and Primary Mortgage Banks (PMBs). In a swift response to public yearnings, and to bolster public confidence in the financial system; in 2010, the maximum Deposit Insurance coverage was increased from N200,000 and N100,000 to N500,000 and N200,000 for deposit money banks (DMBs) and Microfinance Banks (MFBs)/Primary Mortgage Banks (PMBs), respectively”, he said.

He added that the provided of deposit insurance cover and other financial policies have led to consistency in the banking sector

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“NDIC also embarked on other significant reforms in the period including development of Enterprise Risk Management, implementation of Differential Premium Assessment System (DPAS), Capacity Building in Risk-Based Supervision (RBS), deployment of a Performance Management System, enhanced Deb Recovery System and Increased Pay-out to both insured and un-insured depositors.

“As at 30th June, 2019, the Corporation received a total number of 35 petitions/complaints from Banks customers on various issues such as ATM frauds, unauthorized funds transfers, cheque related issues and much more. Investigations and mediation were carried out where necessary and customers were appropriately reprieved.

“Provision of the deposit insurance coverage to subscribers of Mobile Money Operators (MMOs) to the maximum limit of N500,000.00 through the Pass-Through Deposit Insurance Framework. As it stands, the number of licensed MMOs by the CBN is twenty three (23), with eight (8) being “Bank-Led’’ and the remaining fifteen (15) “Non-Bank Led”. As at 30th June, 2019, the number of subscribers to MMOs stood at 9,249,265.

“Following the issuance of the Framework for the Licensing and Regulation of Payment Service banks (PSBs) by the Central Bank of Nigeria (CBN) which stipulated the extension of Deposit Insurance Coverage to the depositors, the Corporation will protect the depositors of PSBs and guarantee to pay them N500,000.00 as insured sum in the event of their closure”, Umaru said.

He maintained that the strides of the Corporation in promoting financial inclusion is already achieving some successes with the collaboration of the Central Bank of Nigeria.

“To assist in the promotion of the financial inclusion initiative of the CBN, the NDIC introduced the Framework for a Pass-through Deposit Insurance scheme to enhance confidence, safety and stability of the mobile payment system. 

” The deposit insurance scheme caters for the interest of the users of Mobile Money platforms as it guarantees payment to the subscribers of the funds domiciled in Mobile Money Operators Trust Pool accounts in insured institutions in Nigeria. The other milestones recorded by the NDIC in the area of financial inclusion has been the promotion of other types of banking sub-sectors such as non-interest banks and strengthening of the Microfinance policy in order to build more inclusive banking system where every Nigerian would have equal access to economic opportunities.