As inactive bank accounts rise to 49m

By Elizabeth Adegbesan

NIGERIANS opened  four million bank accounts in the first quarter of 2019, Q1’19.However, the number of inactive bank accounts rose by 1.7 million or 3.0 percent to 49 million during the period from 47 million in Q4’18, a development attributed to the rate of poverty and lack of access to credit by individuals in the country.

Financial Vanguard analysis data from the Nigeria Interbank Settlement System, NIBSS, on bank accounts for Q1’19, showed that the number of bank accounts increased by 3.5 million or 3.0 percent to 121.638 million from 118.089 million in Q4’19. The number of active bank accounts rose by 1.7 million or 2.5 percent to 73 million in Q1’19 from 71.2 million in Q4’18.

Nigeria- map

NIBSS further revealed that the number of savings accounts increased slightly by 0.18 million or 0.2 percent to 89.3 million in Q1’19 from 89.1 million in Q4’18 while the number of current account rose by 13 percent to 29 million in Q1’19 from 26 million in Q4’18.

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Banking experts who spoke to Financial Vanguard said the increased number of inactive bank accounts reflects to the rate of poverty and lack of access to credit by individuals in the country.

According to Dr. Uju Ogubunka, President, Bank Customers Association of Nigeria, BCAN, “The reasons for increase in inactive bank accounts are obvious. Among several other reasons, many bank account holders have: lost their jobs and have not been able to secure new ones; no credit balances in their accounts to draw from; no credit facilities to keep their accounts active; some travelled out of the country in search of better opportunities/education; inactive    businesses without inflows; living from hand to mouth without need for bank accounts; school graduates without jobs; dislocation from place of residence; some customers opened new account in another bank and abandoned the existing one; some customers have grievances /complaints against their banks and decided to stay action on the accounts.

“In summary, the major cause is that the economy has increasingly been inclement.”

On the way forward, Ogubunka said: “If you are looking for some solutions, let the economy be revived and made to grow; address insecurity that has caused dislocation of quite a number of people; improved banker-customer relationship and marketing approach of banks.”

On his part, President Association of Micro Entrepreneurs of Nigeria (AMEN), Comrade Prince Ichie, said: “The increase in inactive bank account can be attributed to poverty. It is when one has excess money that he would be able to bank and save money. So some people stop banking transactions in their accounts because of their numerous wants. Others decide to hold their money because they are disappointed by their banking activities. Sometimes when you go to the bank, they give so many reasons for failed transactions such as network problem. Some of them probably have been affected by Automated Teller Machine (ATM) inefficiency. A salary earner that is paid N30,000 monthly cannot save in a bank because the amount is not enough for him to take care of the home talk less of saving.”