Financial Inclusion in Nigeria Has Seen Progress, Yet Falls Short of Set Objectives – EFInA Report

A recent report by the Enhancing Financial Innovation & Access (EFInA), has disclosed that Nigeria has made significant strides in improving financial inclusion, however, the country remains distant from its targeted goal of getting 95% of the population financially included by 2024.

According to EFInA, the percentage of adult Nigerians with formal financial services – including bank accounts, insurance, and mobile money rose from 56% in 2020 to 64% in 2023.

The UK government-backed firm said the increase in access to finance in Nigeria, reduces the financial exclusion rate to 26 percent, slightly above the 25 percent target the Central Bank of Nigeria (CBN) hopes to achieve in 2024.

In the report, an increase in the use of non-banking channels, which reportedly grew from 5 percent in 2020, to 12 percent in 2023, drove the growth.

Commenting on the report, EFInA chair, Agnes Martins said, 

“The number of persons excluded financially is unacceptable even though there has been encouraging progress that should be commended. That is a statistic that we must recognize remains unacceptable, and we must redouble our efforts to accelerate their inclusion.

“These are predominantly farmers and dependents, more likely to be female, and to live in rural areas in Northern Nigeria. We need intentional, deliberate strategies to give them financial access and to support them graduate to the products and services that can enhance their resilience.”

Notably, in the EFInA survey, the firm expressed concern regarding the alarming financial exclusion rate in the Northern part of Nigeria, which is said to have the lowest inclusion rate compared to other regions of the country.

Financial exclusion in Northern Nigeria is at 38% in the North East and 47% in the North West, compared to only 5% in the South West and 10% in the South-South.

The huge population of citizens in each state in the Northern region is said to have contributed to the significant financial exclusion rate of citizens in the region, compared to the southwest.

It is however worth noting that the World Bank attributes the growth in financial inclusion partly to the expansion of technology, and Nigeria has recorded significant strides in that area.

In the past decade, several digital platforms and fintech start-ups in the country have revolutionized access to financial inclusion of citizens.

However, despite the remarkable progress Nigeria has made in ensuring that a large percentage of the citizens are financially included, there is still a lot of work to be done, especially with a core focus on the Northern part of the country.