New Perspectives May 2016 | Page 8

Policy Focus

5 Reasons to Support the Consumer Protection Framework for Banking

Clarity because the Consumer Protection

1 Framework ( CPF ) provides that the

Central Bank of Nigeria ( CBN ) is responsible for consumer protection supervision in the banking sector . In other words , the debate about whether a new specialized financial consumer protection agency or the existing Consumer Protection Council in its capacity as the general consumer protection agency should assume this responsibility appears to have been settled at least for now .

Comprehensivity because the CPF has

2 codified the minimum consumer

protection standards for all financial institutions ( FIs ) regulated by the CBN . This means that the Framework will not only apply to commercial banks , merchant banks , microfinance banks and mortgage banks but its coverage will also extend to finance houses , discount houses , bureaux-de-change , mobile money operators , mobile payment companies and development finance institutions such as the Bank of Industry and the Bank of Agriculture .

Charter of rights is included in the CPF .

3 Therefore , consumers will have the right

to be informed ; right to consumer education ; right to choose ; right to safety ; right to confidentiality ; right to redress ; and the right to be treated fairly .

Consumer education is prioritized . The

4 CPF is explicit that improving financial

literacy is an integral aspect of a sound and effective consumer protection regime and to this end the targeted delivery of financial education programmes based on consumer segmentation will be implemented by the CBN and relevant stakeholders .

Complaints handling is standardized

5 across all FIs regulated by the CBN . The

key features include the mandatory publication of performance statistics by the CBN and FIs , formalizing recourse to alternative dispute resolution ( ADR ) and requiring that FIs must introduce a Consumer Compensation Policy .

Practice Note

Implementing Financial Education Programmes for the Unbanked

Recently , DIN was commissioned by one of Nigeria ' s leading financial institutions , Diamond Bank Plc , to implement financial education programmes ( FEPs ) as part of the roll-out of a new saving proposition for the unbanked in its major markets . The question is what does it take to design and execute a successful FEP ? These are the key lessons that we have learnt from implementing FEPs across Nigeria .

Lesson 1 :

Adopt a project management approach This requires a plan for all aspects from implementation and deployment until final closure of the project in particular it should specify what are the deliverables . For example , at the deployment stage , this could be the training or educational materials such as picture cards or posters . The project plan should also explain how project risks and changes will be managed and the communication of project status and milestones through regular reporting .

Lesson 2 :

Understand the target ' s circumstances and needs Success will depend on buy-in from intended beneficiaries . Their participation , convenience and commitment are therefore critical elements . We have found that what has worked has been adopting a group-based approach and identifying viable self-help groups or cooperatives to collaborate with . Identification of such groups can be done through Local Governments and State Ministries of Agriculture and Cooperatives , Youth Development or Women Affairs . It is also worth leveraging on existing contacts , for example , local chapters or affiliates of groups already trained on other

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