July 10, (THEWILL) – The proportion of Nigerians with accounts at regulated institutions – such as banks, microfinance organizations and mobile money service providers – rose from 16 percent to 45 percent in 2021.
This was disclosed by the World Bank in a report titled, “The Global Findex Database 2021: Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19.”
The bank stated that the overall account ownership rate in developing economies increased by 30 percentage points, from 42 percent in 2011 to 71 percent in 2021 – a rise of more than 70 percent
The World Bank stated that global account ownership increased by 50 percent from 51percent in 2011 to 76 percent in 2021. Nigeria’s account ownership growth increased from 30 percent to 45 percent throughout the time period under consideration.
It stated, “Individual economies saw different rates of growth over the past decade. Between 2011 and 2021, economies such as Peru, South Africa, and Uganda drove up the average with account ownership increases of 25 percentage points or more.
The Bank added, “Other economies saw much smaller increases over longer periods. Pakistan, for example, grew by just 10 percentage points over the past decade, from 10 per cent in 2011 to 21 per cent in 2021. The Arab Republic of Egypt and Nigeria increased ownership by 18 percentage points and 16 percentage points, respectively—from 10 per cent to 27 per cent in Egypt, and from 30 per cent to 45 per cent in Nigeria.”
The World Bank stated that having an account is a key indicator of financial inclusion and opens the door for both men and women to use financial services in a way that promotes growth.
Owners of accounts, whether they are with a bank or a regulated organization like a credit union, microfinance institution, or mobile money service provider, were able to store, send, and receive money, allowing them to invest in their health, their children’s education, and their businesses, according to the report.
According to the lender, It is harder for account holders to slide into poverty because they can easily rely on savings or receive financial resources from friends or family in the event of a financial emergency.
The global bank further said the growth in account ownership in Nigeria and other Sub-Saharan African nations was because of the adoption of mobile money.
It stated, “In Sub-Saharan Africa in 2021, 55 per cent of adults had an account, including 33 percent of adults who had a mobile money account—the largest share of any region in the world and more than three times larger than the 10 percent global average of mobile money account ownership.
To underscore its importance, Emefiele, in his second term agenda as the CBN Governor in 2019, put Financial Inclusion at the forefront of his 5-point agenda. He set a target of 2024 to achieve 95 percent financial inclusion.
“Over the next five years, through initiatives and policy measures such as the Shared Agent Network (SANEF) and the payment service banks, we intend to broaden access to financial services to individuals in underserved parts of the country. Our ultimate objective is to ensure that 95 per cent of eligible Nigerians have access to financial services by 2024. We will also intensify our financial literacy and consumer protection programs such that current and eligible bank customers are fully aware of the financial services being offered to them as well as the cost of utilizing these services, which will enable them to make well-informed choices,” Emefield stated in his world press conference on June 24, 2019.
The CBN, thereafter, fired from all cylinders, especially by embracing the Payment Service Bank (PSB) initiative. The move was different from the seeming lackluster, or wait-and-see attitude, it had adopted before then – since 2018 when it rolled out the Guidelines (revised in 2020) for the Licensing and Regulation of Payment Service Banks (PSB) with little results. It eventually embraced the PSB approach after several years of “pressure” from members of the public who urged it to tow the path of successful African countries like Kenya, Ghana and Ethiopia that had become role models in the financial inclusion.
The COVID-19 pandemic sparked financial inclusion and led to a significant rise in digital payments as people opted for alternative payment platforms to comply with COVID-19 restrictions.
The World Bank had stated that Nigeria’s growth prospects have improved for the next three years, mainly to a stronger non-oil recovery and higher global oil prices. However, Nigeria’s macroeconomic framework has eroded, making the country more vulnerable to global and domestic shocks.
