Efforts by the Central Bank of Nigeria to drive financial inclusion, yielding results – EFInA Report

A new data from Enhancing Financial Innovation and Access (EFInA) indicates that efforts by the Central Bank of Nigeria to drive financial inclusion across the nation is yielding result, as over 50 percent of Nigerian adults are using formal (regulated) financial services.

This was disclosed at the recent launch of Enhancing Financial Innovation and Access (EFInA) and Access to Financial (A2F) Services in Nigeria 2020 Survey.

EFInA noted that for the first time the data revealed that more than half of Nigerian adults are using formal (regulated) financial services.

The survey shows that, while more Nigerian adults are financially included, National Financial Inclusion Strategy targets were not met.

The survey also indicated that growth in digital financial services and agent banking highlights opportunities to drive faster progress toward financial inclusion, particularly for excluded groups such as women, rural and Northern Nigerians.

According to the survey, “51 percent of Nigerian adults are using formal financial services, such as bank, microfinance bank, mobile money, insurance, or pension accounts, up from 49 percent in 2018.

“This has largely been driven by growth in banking, with 45 percent of Nigerians banked in 2020, up from 40 percent in 2018.

“Although financial inclusion has grown in the past decade, Nigeria fell short of the National Financial Inclusion Strategy targets for 2020.

“Nigeria had aimed to reach 70 percent  of Nigerians with formal financial services by 2020; the actual figure was 51 percent.

“The strategy also set targets for overall financial inclusion, which counts Nigerians that use either formal financial services or informal financial services that are not nationally regulated, such as savings groups.”

Speaking during the launch, the Deputy Governor, Financial Systems Stability (FSS), CBN, Aishah Ahmad, stated that “financial inclusion … is a strong lever for bridging income inequality, combating poverty and preserving social harmony.

“The CBN has accordingly been at the forefront of the efforts to drive financial inclusion in Nigeria by championing the development & implementation of Nigeria’s National Financial Inclusion Strategy led by the CBN Governor.”

Ahmad who doubled as Chair of the Financial Inclusion Technical Committee noted that, “Despite progress achieved to date, critical groups remained excluded including women, rural dwellers and citizens in the northern area.

“To address the issue with women, CBN launched a Framework for Advancing Women’s Financial Inclusion in Nigeria in 2020 and is leading the industry to implement the framework, which we expect to lead to significant increase in women financial inclusion in Nigeria.”

On his part, the Chief Executive Officer, EFInA, Ashley Immanuel, said, “At our current rate of progress, we will not reach the 2020 financial inclusion targets until around 2030. However, we can reach these targets much faster if we follow paths taken by other African countries that have seen rapid financial inclusion growth due to mobile money.

“EFInA’s Access to Financial Services in Nigeria Surveys show that use of digital financial services and agent networks started to grow significantly between 2018 and 2020.

“Phone ownership has also increased, with 81% of Nigerians now owning mobile phones. Now is the time to build on this initial progress and drive faster financial inclusion growth through digital financial services such as mobile money.

“We can do this by creating an open and level playing field for a wide range of providers, creating the right environment for fintech to thrive, and encouraging partnerships between different providers.”

Gail Warrander, Economic Development Team Leader, Nigeria for the UK’s Foreign, Commonwealth & Development Office, remarked that “The EFInA Access to Financial Services in Nigeria 2020 Survey shows that Nigeria has made progress on financial inclusion but there’s still a way to go.

“The report models how the journey to the financial inclusion goal can be speeded up by encouraging the scale up of mobile money. I firmly believe that the majority of those excluded, especially women and youth, could then enjoy the convenience of financial services, including using remote payments systems. This survey is full of rich data for policy makers, development partners and financial services companies to use.”