Financial exclusion rate higher in Nigeria than other Sub-Sahara African countries
By Dele Ojo
A greater number of Nigerians have not been able to access banking and financial services in recent years, unlike citizens of other countries on the African continent, especially in the Sub-Sahara African countries.
Although Nigeria has a higher proportion of banked adults than many countries, it also has a high proportion of financially excluded adults at 36 percent, while several countries have expanded financial inclusion via non-bank mobile money.
These facts were some of the findings of the EFInA Access to Financial Services in Nigeria 2020 Survey released recently.
According to the Report, if Nigeria experiences rapid uptake of mobile money experienced in some neighbouring countries, financial inclusion targets could be met much faster, although financially excluded are predominantly dependents, reside in rural areas, have low education and low proximity to access points.
“There are 38 million financially excluded adults. Of these, 43.00 percent live in the North West. The North West and North East zones continue to be the most excluded. While progress has been made in the NE, the large population in the NW is predominantly excluded” the Report indicated.
However, while overall financial inclusion continues to grow incrementally, progress has been too slow to meet National Financial Inclusion Strategy targets.
Other findings of the survey include:
▪ Despite challenging economic circumstances, financial inclusion continued to grow incrementally, with more than half of Nigerian adults using formal (regulated) financial services for the first time
▪ At the current rate of progress, the National Financial Inclusion Strategy targets for 2020 will not be met until around 2030
▪ Stubborn access gaps have persisted since 2008 for the most excluded groups: women, Northern Nigerians, Nigerians in rural areas, and youth
▪ The main barriers to financial inclusion remain institutional exclusion, affordability, access, and low awareness
▪ In 2020, we saw faster growth in banking, use of financial service agents, and use of digital financial services
▪ Use of informal financial services also grew, with many Nigerians continuing to use a combination of formal and informal financial services to meet their needs
▪ Only about 1 in 4 Nigerian adults are considered financially healthy (27%), while 39% are coping and 34% are financially vulnerable
▪ Growth in digital financial services, agent networks, and mobile phone ownership (now at 81%) highlights the opportunity to drive faster financial inclusion growth through digital financial services such as mobile money.
Enhancing Financial Innovation & Access (EFInA) is a Financial Sector Deepening (FSD) organisation that promotes inclusive finance in Nigeria. The FSD Network is a family of nine Financial Sector Deepening, or FSD, programmes operating across Africa,.
EFInA was established with support from the UK’s Foreign Commonwealth & Development Office (FCDO) in 2007 and began receiving funding support from the Bill & Melinda Gates Foundation in 2009.
EFInA is renowned, within Nigeria’s financial sector, for providing thought leadership toward achieving financial inclusion and championing the unbanked. By funding and catalysing innovation, providing cutting-edge research, advocating for inclusive policies, and building capacity, EFInA has gained a reputation as an “honest broker” among the private and public sectors in Nigeria.
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