By Providence Ayanfeoluwa

The 28.8 million representing 26 percent Nigerians who are completely excluded from financial system is unacceptable, said Enhancing Financial Innovation and Access, EFiNA Board Chair, Dr Agnes Martins.

To this end, she said: “We must redouble our efforts to accelerate their inclusion.”

EFiNA had in December 2023 launched the 2023 EFInA Access to Finance (A2F) Survey report showing that despite formal inclusion growth to 64 percent in 2023, from 56 percent in 2020, 26 percent of Nigerians are financially excluded, down from 32 percent in 2020.

Note that there is the Nigeria Financial Inclusion Strategy target is to reduce the levels of financial exclusion in Nigeria to 25 percent by 2024. 

The report revealed that those accessing formal financial services through banks increased much more slowly to 52 percent in 2023 from 51 per cent in 2020, showing that growth in formal inclusion is being driven by the increased use of non-banking channels, which grew to 12 percent in 2023 from five percent in 2020.

The survey shows that the gender gap widening to nine percent in 2023, from eight percent in 2020, demonstrates the need to intentionally focus on interventions that support female inclusion.

The report highlighted that rural communities continue to be considerably less likely to be formally included than urban communities. 37 percent of rural Nigerians are financially excluded compared to 17 percent of urban Nigerians.

According to the report, “Farmers and dependents are the populations most likely to be excluded. Exclusion continues to be most severe in Northern Nigeria, at 38 percent in the North East and 47 percent in the North West compared to only five percent in the South West and 10 percent in the South South.

“Usage of broader financial services remains limited demonstrating the urgent need to focus on the quality and impact of inclusion. While credit use doubled to six percent, pension and insurance use remained at eight percent and three percent respectively, well below 2024 target levels.”

On her part, Martins said: “We are seeing encouraging progress towards the NFIS 3.0 recommended goal to reduce exclusion to 25 percent by 2024, and we must acknowledge all the good work that has gone into making this happen. However, we also have to be clear that 26 percent exclusion means that 28.8 million adult Nigerians continue to be completely excluded from the financial system.

“That is a statistic that we must recognise 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. Over the coming weeks we will be engaging all stakeholders to further analyse the data and work collaboratively to develop solutions.”

Meanwhile, the 2023 results show that 26 percent of Nigerians are financially excluded, down from 32percent in 2020, demonstrating clear progress towards the Nigeria Financial Inclusion Strategy (NFIS 3.0) recommended target to reduce levels of financial exclusion in Nigeria to 25 percent by 2024. However, with formal financial inclusion levels at only 64 percent (up from 56 percent in 2020), there remains significant work to do in order to achieve the ambition of the Central Bank of 95 percent formal inclusion in the long term.