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Active bank accounts in Nigeria surge to 111.5 million as COVID-19 drives account opening

A recent NIBSS report reveals the number of active bank accounts surged in Nigeria by 14.41%.

Nigeria’s active bank account increased by 14.41% from 97.485 million active accounts to 111.54 million, data from the Nigerian Inter-Bank Settlement System Plc (NIBSS) reveals.

The increase is a big boost to achieving the  National Financial Inclusion Strategy (now revised)  goal aimed at reducing the financial exclusion rate from the baseline figures of 46.3% in 2010 to 20% in 2020.

Crucial metrics

  • Nigeria recorded a total of 160, 038 bank accounts for the period under review, 30.31% of the accounts translating to 48.5 million accounts were dormant. However, the percentage of dormant accounts reduced within the period under review when compared to the April 2020 figures, while the absolute number increased.
  • As of April 2020, approximately 45. 90 million accounts were dormant which is about 32% of the total bank account obtainable, while in May 2020, the absolute number increased to 48.5 million, however it was only 30.31% of the total bank accounts which is 1.69% down.
  • Total savings account increased by 13.8% from 114.13 million accounts recorded in April 2019 to 129.91million accounts in May 2020. Also, Current accounts increased by 3.59% from 24.3 million accounts to 25.17 million accounts.
  • The financial Inclusion rate as of 2018 was 63.2% which is a 4.4% increase in the 2016 figures of 56.8%. The figures are bound to improve in 2020. To achieve the 70% benchmark in 2020, it is pertinent to leverage on technology to provide affordable financial services.

The licensing of Payment Service Banks and digitization of most of the Deposit Money Banks services have in a long way contributed to the continued improved performance of the financial inclusion figures.

The lock-down period reinforced the position of agent banking as an important part of the financial ecosystem. They are close, convenient, and cost-effective. On an operational basis, most agents had to rebalance through ATM to meet liquidity needs.

On why the total active, savings, and current accounts increased during the period under review irrespective of the gloomy economic situation, Mr. Samuel Olaniyan, a banking expert informs that “the increase is partly due to the lack of better investment alternatives and also due to the lockdown”.

Secondly, due to the pandemic, there wasn’t a lot of money moving around and a lot of people had to make sure their savings is safe and secure (of course in their bank accounts).

From the above set targets, it is not out of place to state that despite the remarkable progress made in the number of active bank accounts and savings which are important metrics in the financial inclusion drive, there is still a room for improvement for Nigeria as far as meeting the financial inclusion target is concerned.

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Nigeria In Focus:

Population - 206.6 million (Compared to South Africa's 59.6 million)

GDP: $504.57 billion (Compared to South Africa's $369.85 billion)

GDP Per Capita: $2,465 (Compared to South Africa's $6,193)