Monday, 8 Nov 2010

SEVENTY per cent of adult Nigerians do not have bank accounts, a report by Enhancing Financial Innovation and Access has said.

According to the report, which was presented in Lagos on Thursday, Nigeria remains largely unbanked with only 25.4 million people, representing 30 per cent of the adult population, having bank accounts.

This leaves about 70 per cent of the adult population with no bank accounts.

The report also said that 39.2 million Nigerians, representing 46.3 per cent of the adult population are financially excluded.

An individual is financially excluded if he has no access to financial services.

The report, prepared by an independent professional and non-profit organisation, Enhancing Financial Innovation and Access, said Nigerians remained largely unbanked with only 25.4 million Nigerians, representing 30 per cent of the adult population, having bank accounts.

The organisation, conceived by the United Kingdom’s Department for International Development, however, said the unbanked adult population dropped from 79 per cent in 2008 to 70 per cent in 2010.

According to the Chief Executive Officer, EFInA, Ms. Modupe Ladipo, while presenting the results of the survey, many Nigerians, for numerous reasons, are unbanked and lack access to formal financial services.

She said, “Financial inclusion is the provision of a broad range of high quality financial products (such as savings, credit, insurance, payments and pensions), which are appropriate and affordable, to serve the needs of the entire adult population, especially the low income segment.”

Billions of naira circulate through the informal sector, which has a negative impact on the country’s economic growth and development.

Ladipo added, “One of the biggest hurdles to improving access to retail financial services is the absence of relevant and reliable data and analysis about how individuals and households manage their finances. The EFInA Access to Financial Services in the Nigeria 2010 Survey serves to bridge that gap and demonstrate the opportunities to extend financial services to the unbanked and under-banked low income segment.”

The Governor, Central Bank of Nigeria, Mr. Lamido Sanusi, represented by the Deputy Governor, Financial Systems Stability, CBN, Dr. Kingsley Moghalu, said that economic growth would proceed at a faster and more sustainable rate if all segments of the population had access to financial services.

Sanusi said, “The enormity of the financial access gap in Nigeria and financial inclusion challenges call for the creation of an appropriate environment for the private sector and other stakeholders to play their own part. This was the major reason for the launching of the Microfinance Policy in December, 2005.”

He, however, said that some of the microfinance banks had not been able to practically perform effective microfinance banking and address the problem of access to finance by low-income individuals.

Sanusi also stated, “Financial inclusion goes well beyond microfinance and the CBN is committed in ensuring financial services providers work more effectively to drive the strategic imperative of financial inclusion going forward.”

The Director, Banca de las Oportunidades, Columbia, Mr. Carlos Moya, said, “By increasing the geographical outreach of the financial system through the use of non-bank agents, Columbia has increased the banked population from 47 per cent to 63 per cent from 2006 to 2010.”

He noted that an enabling regulatory environment that supported innovation was key to the success of creating a financially inclusive system, adding that there were currently over 9,000 agents and the value of transactions through these agents during this period was $4.7bn.

Source: Punch