Results from a total demographic study carried out by the Enhancing Financial Innovation and Access has shown that from a sample of 93.5 million Nigerian adults, only 33.9 million are banked.
According to the EFIA findings, the other 59.6 million adults are either financially excluded or are served by informal financial channels like savings club/pool, esusu, ajo or moneylenders as well as remittances through informal channels such as transport services and recharge cards.
“Essentially, this means that approximately, only one in five Nigerian adults have a bank account, with approximately one bank branch and one Automated Teller Machine for every 10,000 people,” the EFIA stated in its report.
The situation, the report hinted, was indicative of a population that was highly marginalised in the area of access to financial services.
The EFIA is an organisation committed to deepening financial inclusion in Nigeria.
It further stated that since the launch of mobile money in the country in 2012, only 11.9 million adults (12.7 per cent of the adult population) were aware of the service.
The report added that out of the number, only 0.8 million adults (approximately 0.8 per cent of the adult population) currently used mobile money services.
It also indicated that although the formal financial sector had grown over the past two years, there had been no significant impact on the level of financial inclusion.
Statistics from the Central Bank of Nigeria showed that there was an increase of over 300 per cent in value transactions across various mobile money schemes in the country between January and July 2014.
Yet, telecommunication companies in the country said at the end of January 2014, the value of monthly transactions across different networks stood at just N300m, but reached the N1.2bn mark by the end of July of the same year.
The General Manager, Corporate Affairs, MTN Nigeria, Ms. Funmi Onajide, said the figure did not include transactions carried out within individual networks.
“The volume of transactions within the same period also increased from 12,000 deals in January 2014 to 35,000 in July 2014, representing 199 per cent increase. This showed the increasing ability to replace cash with digital money transfer via mobile phones,” she said.
However, when asked why many Nigerians using mobile money were those with bank accounts, Onajide said telecommunication frameworks leveraged huge existing customer base and technology to drive significant adoption and that there was easier opportunity for access to financial services.
She said, “That is why a collaborative approach between the telcos and the banks is desirable.
“Given the population, size and complexity of the Nigerian society, a framework that allows both banks and the network operators drive strategic partnerships will be best suited for the attainment of mobile money vision for Nigeria. Unfortunately, that is not the case at the moment.”
Onajide added that there was an urgent need for an all-inclusive framework that would allow strategic partnerships by all stakeholders, noting that this would ensure that Nigeria could deliver similar growth to that recorded by Kenya.
She added, “This position is premised on the following key facts: African mobile operators have a wider reach than banks today in terms of distribution and, therefore, have the potential to on-board many more customers at the bottom of the pyramid than banks can through their branch networks.
“As a function of this reach, but also because of this being an incremental service alongside core mobile services, the cost of acquisition for a mobile operator is far lower than for a bank.
“Mobile operators are not deposit-taking institutions, and for the overall good of the industry, it seems to us that more collaboration between the banks and the operators is needed.”