Of financial inclusion and NDIC’s partnership with the media

It has since become an annual ritual. As the Nigeria Deposit Insurance Corporation (NDIC) gets set to host this year’s workshop for business editors and finance correspondents across the broad spectrum of the Nigerian media, the one thing that has remained dear to the management is financial inclusion and saving the deposits in unsafe places of 72 million Nigerians who don’t have bank accounts and don’t engage in any banking business.

There are other key issues bedevilling the Nigerian economy that are crying for attention, including ensuring a better deal for the 53 percent of Nigerians currently in the banking system, and why 90 percent of bank deposits are owned by only 2 percent of the population. As has been the tradition over the years, one can bet his last kobo that some of these issues are going to be discussed - and addressed - at the NDIC-Media workshop holding in Kano over the weekend.

In Nigeria today, there is hardly a governmental organisation that has been engaging the media and training its business editors and financial correspondents like the NDIC does. Since his assumption of office about seven years ago, the Managing Director/Chief Executive of the NDIC, Alhaji Umaru Ibrahim, has placed capacity building on the front burner, training his members of staff from top to bottom in areas of need at home and abroad. And just as he desires financial inclusion for the non-formal sectors of the economy, he has gone a big step further by ensuring capacity building is extended beyond the four walls of the NDIC building, expending time and resources to train business editors and correspondents covering not just the deposit insurance aspect of the economy, but the entire gamut of the financial sector in general.

For an industry that has been in recession even before the country found itself in same, the aspect of capacity building has since been abandoned by many media establishments, not because they don’t want to equip their personnel with the needed up-to-date knowledge to do their work, but because they cannot afford it. In the last two years, for example, the cost of newsprint has jumped from one hundred and fifty thousand to almost five hundred thousand naira per ton. What that means is that all newspaper houses spend tens of millions of naira in printing their editions alone. Yet, they still have to cough out huge sums every day to buy diesel and other consumables for production. In most cases, profitability has since been out of the equation. Breaking even itself is as difficult as squeezing water out of stone.

Only media practitioners desirous of career progression, and who can individually afford it, have embarked on training. As if to fill the yawning gap, the NDIC came up with the annual workshop which has not only been expanding the capacity of practitioners in the business genre of the media, but has also been enabling friendships and professional collaboration between media men and women. And it is in this light that the prominent place of the NDIC in the overall development of the Nigerian media and the economy could be located.

The NDIC must have realised that no organisation can truly succeed and achieve its mandate without partnering with the media. This must have informed why in a recent interview with newsmen, the Managing Director/Chief Executive of the NDIC, Alhaji Unaru Ibrahim pointed out that “the media remains a critical and strategic stakeholder in our quest to mould fresh perception amongst our key stakeholders as well as stamp our core mandate of deposit protection in the minds of our teeming depositors through enhanced service delivery.”

One issue that has remained key since the assumption of office of the managing director is financial inclusion; the protection of not only depositors in the formal sector of the economy, but even those in the informal sector, as well. In the words of Alhaji Umaru Ibrahim: “As we crave your role and support in the promotion of financial inclusion in order to attract the unbanked poor to formal financial systems through various workshops, we equally like to seek your partnership toward cascading the philosophy and objectives of the new NDIC brand to our numerous stakeholders”.

Explaining the connection between the mandate of NDIC and financial inclusion, Ibrahim said “Financial inclusion can be regarded as the delivery of financial services at affordable costs to sections of disadvantaged and lowincome segments of society. Financial inclusion is further facilitated by an effective deposit insurance system (DIS) that provides confidence and which allows financial institutions to provide services to a vast majority of people at affordable cost. This is where NDIC as a key financial safety net participant plays a key role.

The partnership that the NDIC has continued to deepen with the Nigerian media has created awareness on its mandate, as well as on its vision and mission. It has also made the NDIC the best deposit insurance organisation in the whole of Africa. Even at that, the Umaru-Ibrahim led management is not resting on its oars. It has since set its sights in becoming the best deposit insurance outfit in the whole world. It is an ambitious target, but one that is doable.

One wonders what will have become of the Nigerian economy without the NDIC, or specifically without the visionary leadership it currently has in place. Every year, for example, hundreds of billions of naira are saved through the diligent supervisory role the organisation plays on deposit money banks. It does not just fold its arms and wait to intervene when a bank goes under. It as much as possible prevents the banks from collapsing. And it is a testimony to the excellent work the management is doing that the incidences of failed banks are fast becoming forgotten issues in the Nigerian economy.

With the clear example shown by the NDIC in ensuring diligent prosecution and conviction of bank chief executives whose antics led to unfortunate collapse of over 45 deposit money banks, management of bank mostly execute their jobs professionally, with banks engaged in healthy competition to attract deposits from millions of customers.

By their nature, banks are vulnerable to liquidity and solvency problems because they transform short-term liquid deposits into longerterm, less-liquid loans and investments. They also lend to a wide variety of borrowers whose risk characteristics are not always readily apparent. The importance of banks in the economy, the potential for depositors to suffer losses when banks fail, and the need to mitigate contagion risks, lead countries to establish financial safety nets, such as the NDIC that has been serving and saving the largest economy in Africa. Gaya is the Deputy President of the Nigerian Guild of Editors.