Nigeria has an insurance penetration of about 2%. This is a major cause of concern for their insurance regulators. A survey indicates that 48% of the adult population in Nigeria has never heard of insurance and 17% do not understand anything about insurance products. The situation demands immediate measures on insurance literacy in Nigeria. CIRM hosted delegates of the Nigerian Insurance Commission (NIACOM) on 17^th Feb 2010 for deliberations on possibilities of replicating Indian experiences in Nigeria. The Indian Micro-Insurance Regulation, 2005 was explored specially and discussed.

 As a follow up to this, Dr. Anupama Sharma, an MBA and vet trained, working in the Livelihoods team at CIRM had the opportunity to be present at the First National Symposium on National Financial Literacy in Nigeria organised by Development Initiatives Network, an NGO and qualitative research group in Nigeria headed by Dr. Bola Fajemirokun. The event was endorsed by the Central Bank of Nigeria and supported by Ford Foundation. The National Coordinator of the National Poverty Alleviation Programme (NAPEP) also sent a goodwill message for success of the programme.

The one day event was broadly divided into two sessions.

The first session was an over view of the financial literacy activities in Africa and other parts of the world and a briefing paper on the National Strategy for financial literacy in Nigeria was presented. Mr. Francis Ntamu is Head, Private Sector, African Development Bank. He focused on the key principles of financial literacy with particular attention on activities being carried out under AfDB initiatives. A Round-Table was organised to discuss developing and implementing a National Strategy. Dr. Thomas Timberg from Medium, Small and Micro Enterprises (MSME), Nigeria, Ms. Ibiere Akpana, Development Consultant were co-panellists with the CIRM representative. Panellists discussed the objectives and different approaches that could be taken by various players around the globe for financial literacy.

 The briefing paper prepared by Ms. Ibiere was presented and it explained the importance of financial literacy with the changes and expansion in the types of financial services throughout the world and it pressed for behavioural change communication as an effective approach for achieving financial literacy. Dr. Timberg expressed his views on the high interest rates charged by MFIs and he provided insights on challenges and constraints which can emerge in the Nigerian context on policy and regulatory levels. CIRM stressed on the inclusion of insurance literacy as a part of an overarching financial literacy effort. Ms. Sharma expressed the need for providing information about the various insurance products to the clients and to ensure the community understand insurance as a concept and not limit the effort to better understanding of product features. Emphasis was given on transparency and using simple products with easy claims process to increase the uptake of the insurance products in the market.

The second session was a discussion with regard to protecting consumers in the financial services sector. Mrs I. Umenyi ,Director General, Consumer Protection Council read her paper and the role and responsibilities of government bodies like Consumer Protection Council was discussed. The Round-Table for the session was facilitated by Ms. Sola Salako who is Chair, Consumer Advocacy Forum and Mr. Andre Wegner of Alitheia Capital, an organisation providing capital to MFIs. Ms. Sola Salako emphasised on the poor and complex processes of banks and other financial institutions. She stressed on using better advertisements for educating masses and using lesser legal text (which hardly anybody understands). Mr. Andre Wegner emphasised on role of MFIs in spreading financial literacy and expressed opinion that financial literacy can also act as best marketing tool for MFIs. The issue of high interest charged by MFIs the market were unhappy with the MFIs high interest rates they charged. Some of them expressed their consent on the role they play in extending credit services to the remote areas. The use of MFIs and their agents for door step insurance literacy was also considered an effective measure.

The event was a success considering it was the first attempt at bringing officials from various banks, MFIs, insurers and the Consumer Protection Council together on a common platform. The Conference ended on a positive note where all participants committed on working together to design a robust financial literacy programme in Nigeria to save the consumers from unnecessary hassles due to their poor understanding of the financial products.

 As financial literacy is the major constraint in spread of financial services even in India, it is of special interest for CIRM to see the experiments in Nigeria carefully and learn from it.