The recently released data from the Enhancing Financial Innovation & Access (EFInA) Access to Financial Services in Nigeria (A2F) 2020 Survey shows that 51 percent of Nigerian adults are using formal financial services, up from 49 percent in 2018.
According to the survey, 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.
The country 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.
The overall financial inclusion target was 80 percent by 2020; EFInA data shows that only 64 percent of Nigerian adults were financially included by the end of 2020. This means that 36 percent of Nigerian adults, or 38 million adults, remain completely financially excluded.
“Despite progress achieved to date, critical groups remained excluded including women, rural dwellers and citizens in the northern area,” said Aishah Ahmad, the deputy governor, Financial Systems Stability (FSS) of the Central Bank of Nigeria (CBN).
According to her, the CBN launched a Framework for Advancing Women’s Financial Inclusion in Nigeria in 2020 to address the issue with women and now leads industry’s implementation of the framework, which it expect to lead to significant increase in women financial inclusion in Nigeria.
The CBN deputy governor and chair of the Financial Inclusion Technical Committee further remarked that the CBN has been at the forefront of the efforts to drive financial inclusion in Nigeria by championing the development and implementation of Nigeria’s National Financial Inclusion Strategy led by the CBN Governor.
“Financial inclusion is a strong lever for bridging income inequality, combating poverty and preserving social harmony,” said Ahmad.
Ashley Immanuel, the CEO of EFInA, said, 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.
“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,” Immanuel said.
Immanuel posits that phone ownership has also increased, with 81 percent of Nigerians now owning mobile phones. According to her, now is the time to build on the 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,” Immanuel stated.
The reports further show that financial inclusion can benefit individuals, families and businesses, supporting key outcomes such as GDP growth.
For the first time, the EFInA Access to Financial Services in Nigeria 2020 Survey measured the financial health of Nigerian adults, finding that only 27 percent of Nigerian adults are considered financially healthy, while 39 percent are financially coping and 34 percent are financially vulnerable.
