The provision of identification and other relevant documents are the bedrock for on-boarding a customer in the bank. The lack of such means of identity is one of the reasons why 36.6 million Nigerian are excluded from the financial cycle, Businessday survey has shown.
According to Lanre Osibona, the Senior Special Adviser to the President on Information, Communication and Technology, over 37 million Nigerians have been registered under the National Identity Number (NIN).
Nigeria’s current population is estimated by the United Nation (UN) to be around 201 million people; going by that figure, Africa’s most populous nation has about 164 million of its citizens without any formal means of identification, as compiled from Businessday’s calculation.
Commenting on the issue, Uzoma Dozie, the last Group Managing Director of Diamond Bank, and Founder/ceo of Sparkle, a mobile-first platform said the lack of identity resulting from low collaboration between various institutions in Nigeria is the reason for the country’s high exclusion rate.
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“To spur financial inclusion; one of the major requirements is identity. India was able to solve its financial inclusion problem through the introduction of the Pradhan Mantri Jan Dhan Yojana (PMJDY) system, which is used as a means of identity, and through that people could open bank accounts,” Dozie told Businessday.
As part of the Know Your Customer ( KYC) and Customer Due Diligence (CDD) procedures as implemented by the Central Bank of Nigeria ( CBN), Deposit Money Banks (DMB) in Nigeria are required by the regulator to obtain identification documents before opening account for their customers.
“I went to open a bank account and they asked for my National Identity card; it made me shy because people were looking at me for not having anything to show. So now I want to register because even if I don’t want to open account again, I need the ID card to receive the money my sister will send to me from the US,” Ofure Imafidon lamented.
Checks by Businessday revealed that Nigerian biggest banks paid penalty to the tune of N10 million in the first six months of 2019 for issues relating to the document used in opening accounts for their customers.
“During the period, the Bank paid a penalty to CBN of N2 million for newly opened accounts without evidence of independent verification of means of identification and search report for some corporate accounts,” Zenith Bank said in its Half year financials.
The same amount was paid by Guarantee Trust Bank (GTB) for AML/CFT regulation on three tiered KYC. While in the same period under review, United Bank for Africa (UBA) paid N6million as penalty resulting from “deficiency in account documentation/ late record retrieval.”
In January 2012, the apex through its collaboration with industry stakeholders launched the National Financial Inclusion Strategy (NFIS) in which it projected that it will ensure 80 percent of Nigerian adult population are included into the financial cycle by the year 2020.
Latest figures by EFINA put Nigeria’s financial inclusion rate at 63.2percent, meaning that as much 36.8 percent adults still lack access.
If the CBN is going to achieve its 20 percent exclusion rate by 2020, the lender would have to ensure it bridge the 16.8 perecnt inclusion gap in less than five months.
“For millions of Nigerians to have means of identification, we would have to leverage technology,” Dozie said.
According to Oghogho Osula, financial expert and former Managing Director/ Chief Executive Officer of Coronation Trustees Limited, Nigeria has a large mobile market, and the huge number provides an opportunity to use it in deploying easy- to- use technology that can improve access to financial services across Nigeria’s mobile financial service platform and “could be the answer to bridging the gap in inclusion level.”
Data by Nigerian Communications Commission (NCC) analysed by Businessday revealed that the total number of subscribers per each individual telecoms operator as at June 2019 stood at 173.75 million.
“With a very well-developed mobile market, and many tech-savvy consumers, there are exciting opportunities for mobilebased digital identity solutions in Nigeria,” Calum Handforth, Senior Consultant at GSMA said.
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