Many Nigerians, for numerous reasons, are unbanked and lack access to formal financial services, which impacts negatively on the country’s economic growth and development. The EFInA Access to Financial Services in Nigeria 2008 survey revealed that only 21.1% of the Nigerian Adult population is banked.
The evolution of Retail Financial Services in Nigeria is currently very topical, with several commercial banks, insurance companies and other financial services providers reviewing their strategies on how to grow their retail segments.
In fulfilling its objective of providing credible market information on the Nigerian financial sector, EFInA recently concluded a supply side survey on the Nigerian financial sector. The primary objective of the survey is to establish the level of access and financial inclusion from a supply perspective. Oxford Policy Management – a UK based development and research consultancy firm conducted the supply side survey on EFInA’s behalf. The Innovation Forum titled: “the Nigerian Retail Finance Landscape” was to disseminate the findings of the survey.
The keynote speaker at the Forum was, Robert Stone, Director, Economic Policy, Oxford Policy Management (OPM). Mr. Stone presented the findings of the supply side survey which included:
- An overview of the Nigerian retail financial sector (demand, supply & regulatory)
- Barriers to increasing levels of financial inclusion
- The gaps in the supply of products better suited to the mass market segment
- Potential opportunities for policy makers and financial services providers to enhance financial inclusion in Nigeria
At the end of the presentation, the key note speaker concluded that there are no simple answers:
- Nigeria, a big and complex country – demographically and economically
- The Federal Government has achieved some successes in the reform of the financial sector, but continues to face important obstacles, mainly lack of access to formal financial services
- Inclusive financial sector development makes two complementary contributions to poverty alleviation: as a driver of economic growth through accessible, affordable and appropriate financial services for low income people. This indirectly reduces poverty and inequality; and can improve their welfare and reduce their vulnerability
- Financial exclusion is widespread in Nigeria, despite the wealth of the country, and is the result of a combination of factors within and outside the financial sector
There are, however, encouraging signs:
- A number of deposit money banks are piloting interesting products and services targeted at the low income segment
- There is strong interest in the use of branchless banking solutions
- There are interesting opportunities for the development of agent banking, given the esusu/adashi tradition in Nigeria
- There is also fertile ground for mobile financial services, given that over 50% of the Nigerian population has access to a mobile phone