Enhancing Financial Inclusion & Access (EFInA) has been deepening the financial inclusion in Nigeria by providing credible market information on the Nigerian financial sector.
It works closely with regulators and policy makers in Nigeria to foster an enabling environment for innovative inclusive financial services and products for the un-banked and under-banked segments.
In the review below, our correspondent identifies 14-key finding of the 2016 Efina’s Access to Financial Services in Nigeria Survey that the company recently unveiled to the market. It conducted the first survey in 2008.
- Compared to other countries in Sub Saharan Africa, Nigeria has one of the lowest penetrations in mobile money. So, despite the fact that Nigeria has one of the highest banked population (38.3%), the percentage of financially excluded is the highest at 41.6%.
- For the first time since the survey in 2008, the geo-political zone with the highest proportion of financially excluded adults is the North-West Nigeria.
- Financial access is skewed towards male adults. Adult men are more likely to be banked than adult women. Adult women tend to use more formal and informal financial services than adult men.
- 53.5% of the 18 to 25 age-bracket are excluded financially. The highest level of formally included are in the 36 to 45 age bracket.
- Banking services are not getting to rural areas however, formal other and informal services are reaching rural areas.
- In 2006, there were 2.0% increases in banked adults but overall decrease in financially served adults. Deposit money banks have been better able to withstand the economic crisis and maintain their customer acquisition drive at the expense of formal other and informal channels like MFBs most of which have struggled under the economic strain.Banks have focused more on the population that already has some level of financial stability and this group is better able to cushion the effects of the economic hardship in the short term.
- There were 2.1% increases in excluded adults. Effects of recession (loss of jobs, lower disposable income, increasing inflation) have an immediate negative effect on the B-O-P (Bottom of Pyramid) population who do not have the means to cushion themselves against these shocks.
- There were shrinking access through ‘Formal Other’ and ‘Informal’ segments • MFBs were struggling under the burden of re-capitalisation during the tough economic climate and lack of trust of MFBs contributed to the development. There were also less income available to the B-O-P to save through cooperatives and other informal channels hence resorting to keeping monies at home or on self
- Majority of Nigerian adults (67.0%) do not borrow. However, among those that do, borrowing from family and friends is the most common source.
- Family and friends are the main sources of financial advice and security. Most adults consider individual savings as the main avenue for securing future financial needs
- Almost 50% of adults in Nigeria ran out of money in the past 12 months and had to draw from their savings to make up for the deficit. Some adults (prominently among the financially excluded) do nothing in times of shortage except hope and pray for a change.
- Insurance uptake remains low at 1.9% of Nigeria’s adult population
- 17% of the adult population are aware of Micro Insurance; however only 2% of them actually have a product. Health insurance is the most commonly held micro insurance product. However, business cover for goods/stock and agriculture attract more interest among potential users.
- 16% of the adult population are aware of mobile money, however only 1% of them actively use mobile money services