On 30th March 2017, EFInA - Nigeriaâ€™s leading organisation promoting financial inclusion in the country has released the findings from its Access to Financial Services in Nigeria 2016 Survey, funded by the UK Department for International Development (DFID) as part of its long-standing effort to enhance financial inclusion in Nigeria.
This EFInA Survey is an essential tool for analysts, policy-makers and the industry, as it gives a detailed view of trends in access and usage of financial services in Nigeria. The biennial survey has been previously conducted in 2008, 2010, 2012 and 2014.Â
The 2016 Survey covered over 23,000 adults across all 36 states of Nigeria including the FCT Abuja. The Survey utilised statistically relevant sampling validated by the National Bureau of Statistics to provide a balanced picture of financial access in Nigeria by product, service and channel, as well as across urban and rural areas, gender, and socio-economic segments of the population.
Notable results from the 2016 survey are as follows:
- Out of 96.4 million adults in Nigeria, 56.3 million (58.4% of the adult population) are now financially served.
- 46.9 million adults (48.6% of the adult population) are formally included â€“ e.g. by banks, licenced microfinance providers and mobile money operators. This represents an increase of additional 1.5 million adults in the formal financial sector in comparison with 2014.
- In particular, 36.9 million (38.3% of the adult population) have access to a bank account. This represents an increase of 3 million adults, from 33.9 million in 2014.
- However, 40.1 million Nigerian adults (41.6% of the adult population) are still financially excluded (without any form of access to financial services). The National Financial Inclusion Strategy target is to lower this figure to 20.0% of the adult population by 2020.
- The proportion of Nigerian adults with access to formal and informal services shrunk marginally from 60.5% in 2014 to 58.4% in 2016, due to a slight reduction in the appeal and coverage of informal services.
- In comparison to other African countries, Microfinance Banks (MFBs) and Mobile Money Operators (MMOs) have also not significantly impacted financial inclusion between 2014 and 2016.
The survey results also revealed steady growth in the number of people using formal payments channels such as ATMs, debit/credit cards, PoS devices, internet/mobile banking and over-the-counter transfers (from 24.0% to 38.0%) and savings products (from 32.0% to 36.0%) while the uptake of formal credit, insurance and pensions held steady between 2014 and 2016.
During the unveiling of key findings on the EFInA Access to Financial Services in Nigeria 2016 survey to a selection of key stakeholders, including the Central Bank of Nigeria, it was noted that with an increasing adult population, the percentage of adult Nigerians with access to financial services grew significantly during the period 2008 to 2012 (47.5% to 60.3%), remained almost the same in 2014 (60.5%) and showed a slight decline in 2016 (58.4%).Â
While the challenging economic environment in 2015-2016, which led to a reduction in disposable income, is a key reason for the decline in financial inclusion in 2016, financial services operators are encouraged to be more innovative. It is time for the financial sector to develop creative, â€˜out-of-the-boxâ€™ products with clear value propositions for low-income groups, focusing on their financial life cycles and behaviour, in order to attract them into the financial services sector.Â
Emerging areas such as micro-insurance could be bundled with traditional products, and agent networks should proliferate to reach previously unbanked and under-served segments of the Nigerian population in deprived and rural communities.
The EFInA 2016 Survey results also revealed that 53.5% of youths between the ages of 18 to 25; 52.5% of rural dwellers; and 46.6% of women are financially excluded; these segments provide potential areas of focus for financial service providers.
In addition, mobile money uptake continues to be low, with a slight improvement from 0.8% of the adult population in 2014 to 1.0% in 2016. A similar trend was noted in terms of the percentage of insured adults (1.7% in 2016, up from 1.1% in 2014).Â With 60.4% of the adult population owning a mobile phone, opportunities exist for providers to adopt digital financial channels as a more cost-effective way to deploy their products and services.
EFInA is committed to continue supporting the regulators and industry in tackling the remaining challenges in the deepening of the Nigerian financial sector, in order to help the country close the gap between the financially included and excluded.
For further information, please visit: www.efina.org.ng