The Enhancing Financial Innovation & Access (EFInA) survey has showed that 63.6 per cent of Nigeria’s adult population has access to financial services and only 36.6 per cent are financially excluded. COLLINS NWEZE ex-rays how some states and regions stand on the financial inclusion chart and what should be done to raise their performances.
Will the Central Bank of Nigeria meet (CBN) achieve its 80 per cent financial inclusion target by year-end? That question has been begging for answer in the last few years.
But the plan received a major boost with the latest figure from the Enhancing Financial Innovation & Access (EFInA) survey showing that 2.6 million more people have embraced financial services.
The EFInA survey showed that 63.6 per cent of Nigeria’s adult population has access to financial services and only 36.6 per cent are now financially excluded.
The EFInA is a non-governmental organisation (NGO) and a financial sector development organisation funded by the Department for International Development (DFID) and Bill & Melinda Gates Foundation to promote financial inclusion in Nigeria.
The firm conducts surveys every two years to determine the rate of financial inclusion.
Regionally, the Southwest and Southeast, two zones with the least financial exclusion rate in the past, had underperformed in the last two years. The zones recorded exclusion rate of 18 per cent and 28 per cent in 2016, compared with 19 per cent and 29 per cent exclusion rate, in 2018.
All the other zones, however, recorded significant decrease in exclusion rate in the last two years with the Southsouth zone improving from 31 per cent in 2016 to 23 per cent in 2018, and the Northcentral achieving 31per cent in 2018 from 39 per cent in 2016. Northeast and Northwest scored 55 per cent in 2018 from 62 per cent in 2016 and 62 per cent in 2018 from 70 per cent in 216.
The regional breakdown shows that Kano, Jigawa and Katsina states in the Northwest Zone failed to achieve the region’s average of 62.4 per cent, with Kano having the highest exclusion rate of 75.2 per cent. Gombe, Bauchi and Yobe states fell below the average in the Northeast region (54.5 per cent). Gombe, for example, had the highest exclusion rate of 76.1 per cent, Bauchi 60.8 per cent and Yobe 60.0 per cent. Taraba had the least exclusion rate of 30.9 per cent in the region.
In the Southeast zone, Ebonyi emerged the only state that failed to achieve an exclusion rate below the average of 29.3 per cent. The state recorded a financial exclusion rate of 43.6 per cent. In the Southsouth zone, Bayelsa, Akwa Ibom and Edo states had an exclusion rate more than the average in that zone (22.7 per cent).
The states had 35.3 per cent, 29.1 per cent and 25.4 per cent.
The EFInA’s report was the outcome of a research across the country, with 750 respondents in each of the 36 states and the Federal Capital Territory (FCT), and 27,470 interviews, which represents 97 per cent of the target samples of 28,380.
The survey was anchored on several indicators, including banked population, remittances, savings with a bank, payments, received income, loan with a bank, and banking agents, among others.
An increase of 1.4 per cent in the banked population from the 2016 to 2018 was found, a decrease of 2.2 per cent in remittances between in two years, and another decrease of 6.7 per cent in savings with a bank within the period. The indicators of payments received income and banking agents recorded increases of 3.4 per cent, 1.3 per cent and 0.6 per cent respectively, while loan with a bank remained static at 1.3 per cent.
The report, however, found a decrease of 1.6 per cent (from 30.1 per cent in 2016 to 28.5 per cent to 2018) in the non-bank indicators of pension; savings through other formal institutions; mobile money; mobile money agents; insurance; remittances; and loans with other formal institutions.
Also, with five per cent financial access points for the Northeast and seven per cent for the Southeast, both regions remain disadvantaged in access to financial services despite efforts by the CBN, Bankers’ Committee and commercial banks to take banking to the grassroots.
The EFInA survey report concluded that three factors – affordability, institutional exclusion and lack of awareness – were the biggest obstacles to financial inclusion.
According to EFInA, 60.1 million Nigerians do not have/use a bank account, 96.3 million do not have/use mobile money and 97.9 million do not have insurance.
On the digital usage in the country, it shown that mobile money, which was thought to be useful in the financial inclusion drive, was found to only deepen rather than expand financial inclusion. The re-port, therefore, revealed that while 35.5 million Nigerians (36.6 per cent of the adult population) use bank accounts, only three million adults have mobile money and bank accounts, whereas 59.4 million (60 per cent) neither have mobile money nor bank account.
Similarly, the study showed that while 82 per cent of adults, comprising subsistence farmers and small business owners, receive their income in cash, 10 per cent of those adults receive their own income via mobile money or bank account, while another eight per cent did not receive any income at all.
Savings dropped by 13.3 per cent, according to the report, while savings in assets, property, and livestock had risen from 47.4 million to 54.7 million since 2016. Other decrease on this indicator was that of borrowing, which went down by two per cent and remittances to one per cent.
On financial access by gender, the report indicated that of the 99.6 million adults, 33.5 million male adults were financially included compared with 29.4 million female adults. This represents a decrease in the exclusion rate of 4.3 per cent and 5.7 per cent in the male and female gender, and a decrease of 4.8 per cent for gender compared with the 2016 figures.