Almost 36% of Nigeria’s 106 million adults are not able to access digital financial services.
This figure is a significant increase from the 36.6 million adults who were not able to access financial services in 2015. According to the study, about 52.5 million adults were financially excluded in 2014. These individuals gained access to financial services through the informal or unregulated channels.
- Youth in Nigeria covers all residents aged 18 to 29 according to the new youth policy (2019).
- Nigerian banks are creating products exclusively for financially excluded customers.
- The number of people without banking access still continues to grow
Seven years ago, Nigeria implemented a cashless policy. Its objective was to encourage the use of electronic transactions. The rise of e-fraud has been a major challenge for the cashless banking system. It is estimated that around 10% of transactions involve fraud. The corruption that occurs in Nigeria affects the countrys progress. Its effects are severe and can lead to a lack of investment in key infrastructure. About N15.5 billion was stolen from banks in 2018. Most of the fraud was carried out online.
According to the EFIA, the mismatch between the number of adults that are unbanked and the actual number of people that are is growing is largely due to the countrys population growth. The proportion of adults in Nigeria who are formally served has increased for the first time in three years. Half of the adult population in Nigeria is not in a formal financial system due to various factors such as high poverty rate, high cost of account maintenance, and proximity to service points.
However, despite this improvement, the number of unbanked adults in the country still remains high. According to a study conducted by the World Bank, 1 in every 11 adults in Kenya is unbanked. This figure shows that the country with the lowest number of unbanked adults is Uganda. The latest data released by the NIBS reveals that the number of bank account holders in the country has decreased to about 46 million. In 2019, the number of bank customers in Nigeria has reached 73.2 million. The country has a large adult population and low credit card penetration.
The study findings also indicated that digital financial services are becoming more prevalent in Nigeria. Mobile phone ownership has increased to 81%, which indicates the potential for faster growth in digital financial services. The report only talks about the potential impact of digital financial services on the country’s financial inclusion targets. It failed to provide details about the various digital financial services that Nigerians are using.