Nigeria misses the target of expanding access to financial services

(Bloomberg) – Nigeria fell far short of its goal of getting more of its citizens into the regulated financial system, with the impact of the pandemic and the difficulty of entering rural areas weighing on efforts.

Nearly 36% of Nigerian adults did not have a bank account at the end of 2020, according to EFInA, a UK-backed development organization working to strengthen inclusive finance in Nigeria. The number has barely changed from two years ago and is well above the government’s target of 20% that it set in 2013.

Nigeria, the most populous country in Africa, has tried to get more of its citizens into the formal financial sector to modernize its economy, increase tax collection and shed informal jobs that often exploit workers. It has licensed banks, cellular operators, and tech companies to offer services to expand access, especially for the two-thirds of the population living outside of cities.

The EFInA also said pandemic-related job losses and social distancing measures are hampering efforts to gain wider access to banks.

“The 81% growth in digital financial services, agent networks and cell phone ownership now underscores the opportunity to drive faster financial inclusion,” EFInA said in a report Thursday. “With the current progress, the goals of the national strategy for financial inclusion for 2020 will not be achieved until around 2030.”

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