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Financial Literacy

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An important mandate of the Central Bank of Nigeria (CBN) is the promotion of a sound financial system” in Nigeria. A key aspect of this function is the entrenchment of effective consumer protection regime that not only protect the rights of consumers but also engender public confidence in the financial system..

The current realities in the Financial Sector show that, it is only when the interest of consumers is given proper attention and protected that public confidence would be restored in promoting a strong and stable economy. Though there exits many educated and literate Nigerians, a high percentage of the population does not have the requisite skills to effectively manage their financial transactions and take advantage of the opportunities presented by the financial products and services to improve their well-being.

Consumers of Financial Services have also been subjected to unethical practices from financial institutions which could be attributed to their low levels of financial literacy arising from their lack of knowledge of their rights and obligations in their relationships with the financial institutions.

The Central Bank of Nigeria made a commitment in 2011 referred to as the “MAYA DECLARATION”, to reduce the number of financially excluded Nigerians from 46.3% in 2010 to 20% by the year 2020. To ensure the fulfilment of this obligation, a National Financial Inclusion Strategy was accordingly developed and launched in October 23, 2012. The strategy identified consumer protection and its constituent pillars of Market Conduct, Dispute Resolution & Consumer Education as critical to the attainment of its objectives.

Financial Literacy, Consumer Protection & Financial Inclusion

An essential pillar of any consumer protection programmes is Consumer Education through ‘financial literacy’, defined as “the possession of knowledge and skills by individuals to manage financial resources effectively to enhance their economic well-being”.

It is only when the vast majority of the Nigerian population is financially literate that they can participate in the formal financial system, by becoming aware of and taking advantage of its opportunities, get financially included and thereby contribute to the financial and economic development of Nigeria.

The Rationale For Financial Literacy/Capability

  • Globalization/Evolving Market Place
  • Innovation in financial products and services
  • Market Sophistication
  • Information Asymmetry
  • Market Power Imbalances
  • Market Indiscipline
  • Unsophisticated Consumers (low levels of knowledge & Understanding)
  • Shift of Financial Management risks from Governments to individuals
  • Weak or non-existing Consumer Protection regimes
  • The quest for Financial Inclusion

Development & Implementation Of The Financial Literacy Framework

As a key implementation priority of the Financial Inclusion Strategy, the Central Bank of Nigeria developed a Financial Literacy Framework (FLF) in January, 2013. The document articulates a strategic direction for a multi stakeholder approach to the delivery of financial education programs across various target groups of the population in Nigeria.

In the course of the implementation of the FLF, the Consumer Protection Department embarked on several consumer education activities aimed at improving the financial literacy levels of consumers of financial services. Notable among these were:

a) Financial Literacy Mass Awareness & Sensitization Campaigns

In order to reach members of the organised private and public sector as well as the general public and grassroots, the Consumer Protection Department covered 12 States across the 6 geo-political zones namely; Ogun, Rivers, Kano, Plateau, Gombe, Imo, Niger, Bauchi, Sokoto, Cross River, Oyo and Enugu, where it conducted a 2-day Mass sensitization Workshop and Media awareness campaigns.

The topics presented at these Workshops included;

  • How to lodge a Complaint
  • Importance of Financial Literacy
  • Your Rights and Responsibilities as a Bank Customer (Customer Bill of Rights)
  • Dud Cheques and the Financial System

b) School Reach Out & Mentoring Programme

In collaboration with the members of the Bankers’ Committee, the Central Bank of Nigeria with the sole aim of inculcating the right financial habits and skills in children that would make them take the right decision that will enhance their financial well-being, have facilitated at School Mentoring/Reach-out Programmes such as,

Commemoration of the annual “Global Money Week” in 2013 and 2014;
Commemoration of the annual “World Savings Day”, to teach students various financial literacy topics like; importance of saving, investing/growing your money, etc.

TV appearances, radio phone in programmes and print media to educate members of the banking public of CBN’s recent consumer protection regulations.

School Curriculum Development: The Consumer Protection Department has continued to provide leadership in the development of a Financial Literacy Curriculum for Primary and Secondary Schools in Nigeria. 

Implementation Of The National Financial Literacy Framework

The FLF was reviewed in 2013 based on feedback from stakeholders in the course of its implementation and has now been renamed the ‘National Financial Literacy Framework’ (NFLF). The NFLF aims to promote financial literacy to drive the National financial inclusion policy that will ultimately promote economic growth.

The NFLF identified various consumer market segments and corresponding relevant programmes that Financial Literacy activities will be implemented within the short, medium and long term to these segments. The Segments are as follows:

  • Adult Emerging Market (MSMEs and Farmers)
  • Adult Formal Market
  • Youth Market
  • Intermediaries

Benefits Of A Financially Literate Nigerian Population

Financially literate consumers would be beneficial to themselves, the financial institutions/providers and the larger economy in the following ways;

  • Better equipped to make optimal choices in the use of financial products;
  • Pose lower credit and default risk;
  • Constitute a market for sustainable financial services & Products;
  • Reinforce competitive pressure on FIs for better products & services;
  • Promote Financial System Stability by Increasing market demand, and responsible use of financial services.



Facts : 1/1/1995
Magnetic Ink Character Recognition:The Magnetic Ink Character Recognition (MICR) which is an automated system for sorting cheques and other financial instrumenTS. This facility came into effect in the early part of 1995.
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