Nigeria: More Efforts Needed On Access To Financial Services

Despite the country’s efforts at improving access to financial services, 43 percent of Nigerians has remained financially excluded. This is according to the Financial Inclusion Report released by the Lagos Business School (LBS).

Speaking on the research findings which further indicates that eight per cent of Nigerians owned a mobile money account, while 36 per cent used informal financial tools, Academic Director, LBS, Dr. Olayinka David-West, who also leads the Sustainable and Inclusive Digital Financial Services initiative, said this was an indication that Nigeria was not on track to achieving its financial inclusion target by 2020.

According to the Central Bank of Nigeria (CBN) National Financial Inclusion Strategy, the percentage of adult Nigerians that do not have access to financial services should move from its position at 39.7 percent in 2012 to 20 percent in 2020. Also, 70 percent of adult Nigerian’s should have access to payment services in 2020.

Channels through which people can access the services such as branches of banks, microfinance banks, number of ATMs, mobile agents, POS, agents of deposit money banks are also expected to increase to specified target numbers per 100,000 adults in 2020.

The LBS report further explained that “Six customer segments of financially excluded persons were identified. These are vulnerable believers, which amount to 12 percent of the population, resilient savers (21 percent), dependent individualists (22 percent), digital youth (19 percent), confident optimists (14 percent), and skeptical cultivators (12 percent).”

David-West noted that limited knowledge of customers was one of the many challenges of financial service providers. According to her, this limitation often resulted in the misidentification of customers’ needs.

She said the customer segments presented in the report provided insights into the behavioral and attitudinal traits of the bottom of the pyramid population, which is currently estimated at 75 percent of Nigeria’s population.

She stated that the report aimed to provide financial service providers with correct information to create fit-for-use, segment-aligned digital financial products.

In an earlier report, Global Accelerex, a financial service provider, which explained financial inclusion to mean, “that individuals and businesses have access to useful and affordable financial products and services that meet their needs and delivered in a responsible and sustainable way” put the figure at 40.1 million, representing 41.6 percent. Quoting Access to Financial Services in Nigeria (A2F) 2016 survey figure, which put the banked population at 36.9 million representing 38.3 percent banked, Global Accelerex attributed the stunted financial access to low-income level, largely rural population, financial illiteracy, poor coverage by banks, unprofitability for traditional banking and lack of innovation by financial institutions.

According to a Director at Dalberg, Nneka Eze, financial inclusion goes beyond opening or owning a bank account, but entails how often the account is accessed and used, and how the financial service providers assist or influence the individual’s life.

“We want a situation where we can keep more money within the formal financial institutions, and not the rural/non-formal ways,” she enthused.

 

 

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