Enhancing Financial Innovation and Access (EFInA), a financial sector development organisation, has said the percentage of Nigerians within the financial system has increased to 58.4 per cent of the adult population as it notes that only 4.2 per cent of the adult population source their income from the formal sector.
The Chair of EFInA ’s Board, Ms. Modupe Ladipo, speaking at a workshop with stakeholders in Lagos yesterday said “out of 96.4 million adults in Nigeria, 56.3 million are now financially served.”
She noted that 40.1 million Nigerian adults (41.6 per cent of the adult population) are financially excluded (without any form of access to financial services).
The National Financial Inclusion Strategy target is to lower this figure to 20 per cent of the adult population by 2020.
She commented that EFInA observed that the North had a high level of financial exclusion.
This is as a result of massive job losses, limited resources and no basic necessities of opening a bank account.
Ladipo, while sharing key barriers responsible for increasing the financially excluded population in Nigeria said “generally, income levels in Nigeria are very low. 19.6 per cent of Nigerians mainly get their source of income from non-farming business while 19.1 per cent get theirs from family business (subsistence or commercial farming). Only 4.2 per cent of the adult population get their source of income from the formal sector.”
She highlighted the issue of inaccurate data in assessing economic growth in Nigeria.
“There are lots of issues in terms of validation and credibility. According to National Identity Management Commission (NIMC), only six per cent of Nigerians are duly registered as at 2016.
“Only 24 per cent of the population has a Bank Verification Number (BVN). We really need to devise how to get a unique form of identification so that we can start to address some of these issues,” she said.
She emphasized that the number of microfinance adult users declined from 2.6 million in 2014 to 1.8 million in 2016, noting that there was a general problem around trust as the licenses of some microfinance banks had been revoked.
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With a lot of bank charges, account owners are left with little money in their bank account, she added.
Similarly, the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development, Queen Maxima of Netherlands, gave a keynote address on the ‘Transformative Power of Financial Inclusion’.
She stated that adopting inclusive strategy was a powerful tool to expanding opportunities for all Nigerians.
She highlighted the current progress made in the National Financial Inclusion Strategy, and emphasised to stakeholders the need for high-level political leadership and the participation of the private sector in achieving the targets.
Queen Maxima went on to stress that allowing mobile operators to provide mobile money accounts could be a game changer for financial inclusion in Nigeria, and that stakeholders prioritised the development of inclusive retail e-payments system that served as a basis to distribute other financial services such as savings, payment, credit and insurance services.
She stated that the process of revising Nigeria’s financial strategy indicated huge opportunities to leverage technology.
She said, ‘‘Utilising technology and expanding mobile money is one of the most promising tools to addressing this gap. It allows user to access their accounts remotely through their mobile devices. Currently Nigeria has 58.2 million unique mobile phone users, the contrast to 27 million using mobile banking. This underscores the immense potential which mobile banking shows for advancing financial inclusion.”
