Nigeria records 11% increase in active bank accounts but 45m remain dormant
Nigeria’s active bank accounts increased to 79.28 million in December 2019, thanks to the additional 8.1 million accounts that became active, data from Nigeria Inter-Bank Settlement System Plc (NIBSS) shows.
Despite the 11.33 percent surge in active banks accounts last year, the country with 40 million unbanked population reported 45.57 million dormant accounts.
While Nigeria recorded a total of 124.85 million bank accounts in the year under review 36.5 percent of the accounts were inactive.
BusinessDay analysis of the NIBSS data revealed that the dormant bank accounts reported last year reduced slightly by 1.32 million compared to the 46.89 million the previous year.
According to the World Bank access to a transaction account is the first step toward broader financial inclusion “since it allows people to store money, and send and receive.”
Latest figures by EFInA put Nigeria’s financial inclusion rate at 63.2percent, meaning that as much 36.8 percent adults still lack access.
The Central Bank of Nigeria (CBN) through its National Financial Inclusion Strategy (NFIS) plans to ensure that 80 percent of Nigerian adults are included in the financial net by the year 2020.
If the apex bank is to achieve its objective through the strategy launched seven years ago, it would have to bridge the 16.8 percent inclusion gap before year-end.
But the CBN had in a circular on July 2018, lamented that Nigeria was not meeting any of the financial inclusion targets agreed and contained in the 2012 Financial Inclusion Strategy.
Not only was the country not meeting its targets, but it was also declining in growth. For instance, while Nigeria achieved 60.3 percent in 2012, it declined to 58.4 percent in 2016 against a target of 69.5 percent translating to financial exclusion of about 41.6 percent.
To achieve a more inclusive financial inclusion at an affordable rate, industry experts have advised that Nigeria would need to leverage technology to give access to its excluded population.
“The roll-out of Payment Service Banks guidelines that allows licensing of telco subsidiaries is welcome and should be implemented,” International Monetary Fund (IMF) said in April 2019.
Telecommunication operators’ push to offer mobile money services in Nigeria received the official nod of the regulator, the Central Bank with the issuance of guidelines for players to apply for the licence.
But a year and two months after the Central Bank loosened its policy to accommodate new players in Nigeria’s financial services industry; the direction of the mobile money initiative remains unclear.
Since October 2018 when the apex bank requested that industry players should apply for the licence to operate as a Payment Service Bank (PSB), only three firms; Hope PSB a subsidiary of Unified Payment, Globacom’s Money Master and 9Mobile’s 9PSB have been issued Approval-in-Principle (AIP).
A PSB license will allow the companies to among other things; maintain savings accounts and accept deposits from individuals and small businesses, which is covered by the deposit insurance scheme; carry out payments and remittance (including cross-border personal remittance) services through various channels within Nigeria; issue debit and prepaid cards, and operate an electronic purse or wallet.
According to London based Group Special Mobile Association (GSMA), “from a regulatory perspective, one basic requirement for mobile money to succeed is to create an open and level playing field that includes non-bank mobile money providers such as Mobile Network Operators (MNOs).