Nigeria miles away from financial inclusion goal

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Nigeria’s journey to becoming the Giant of Africa, especially in financial inclusiveness, ifarther than it appearsas its payments market fell behind other African nations like Kenya, and South Africa in FT Partners’ FinTech Industry Research; only 6% of the nation’s bankable population hamobile money accounts. 

The report, which was obtained by Nairametrics, rated the most populous black nation behind Kenya’s 73% and South Africa’s 19%. Also, Nigeria’s Smartphone penetration (27%), accounts in financial institutions (39%) and debit/credit card ownership (35%) all fell behind Kenya’s 60%, 56%, 44% and South Africa’s 64%, 67%, 43% respectively.  



The report agrees that Nigeria is the largest country in Africa, both in terms of population and GDP, but argued that its economic growth has been slower than many of its peers in SubSaharan Africa. This is primarily because its economy is still heavily reliant on oil, with petroleum products accounting for a majority of the country’s total exports.  

  • Over 20% of the population is currently considered middle class, a share which is likely to increase steadily in the coming years. These demographic tailwinds should boost Internet penetration and drive adoption of digital financial services, though poor infrastructure  particularly outside of urban areas – will remain a significant constraint on growth in the country.  
  • Nigeria enacted a National Financial Inclusion Strategy in 2012, and has seen growth in its banking and payments sectors since then. Further, its Central Bank introduced Payment Service Banks (PSBs) in 2018, with the aim of extending banking services to an additional 60 million Nigerians by 2020.  
  • Over 95% of Nigeria’s transaction volume is currently cash-based, providing significant room for growth but the country’s limited communications infrastructure and comparatively restrictive trade policies will remain near-term roadblocks. 
  • From 2014  2016, it stated that Nigeria’s formal financial accounts grew by 1.5 million, and the number of financially excluded adults grew by a larger 2.1 million. “Recent regulatory measures have created more flexibility and opportunities for emerging FinTech players to accelerate innovation within payments and further financial inclusion.”  

[READ MORE: FG to capture 80% adult in financial inclusion net]


Researchers in FT Africa described the East African nation as the pioneer in the wave of digital payments.

  • According to the report, Kenya stands out as the largest and most successful adopter of mobile wallets, which have surpassed formal bank accounts.
  • This success is most prominently defined by the impact of two main services: M-Pesa, which owns 81% of the country’s mobile money accounts, and Equitel, which accounts for the remaining 19%.
  • A relatively favourable regulatory environment has enabled MNOs to issue e-money and create partnerships with banks to deliver financial services.
  • Safaricom has an expansive wireless network across Kenya, with over 80% of the population expected to be covered by 4G in 2020.
  • M-Pesa was conceived as a pilot program by Safaricom’s parent company, Vodafone, which had received a grant from the UK’s Department for International Development to provide services to the unbanked.
  • M-Pesa allows customers to use their phones’ SIM cards as virtual bank accounts to pay bills, send or receive money via SMS, and easily withdraw and deposit funds through their phones.
  • In 2013, Safaricom and the Commercial Bank of Africa launched mobile banking service M-Shwari, which provides M-Pesa users access to savings and credit products, even if they don’t have traditional bank accounts.

South Africa 

As one of the continent’s more developed economies, South Africa’s financial services infrastructure is the most advanced in Sub-Saharan Africa.

The FT report stated that the country boasts significantly more accounts at financial institutions, as well as higher card penetration and smartphone penetration than other countries in the region.

  • e-Commerce is proving to be an important industry for payments technology, with growing demand for convenient solutions and increasing penetration of smartphones and mobile devices.
  • Financial services infrastructure is more advanced than those of most African nations, but it still has a large informal cash-based economy, and limited access to formal credit, savings and insurance for many citizens. These factors, coupled with its high internet, mobile and smartphone penetration, make the country an attractive market for FinTech innovation.

Standard chartered

[READ ALSO: Financial Inclusion: Fintech firms got $400 million investment in 2019 – Emefiele]

Though recent regulatory measures have created more flexibility and opportunities for emerging FinTech players in Nigeria, it is important for the country to address its limited communications infrastructure and restrictive trade policies in order to compete favourably with Kenya and South Africa.

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