Between 2014 and 2017, the amount of banked adults dropped nearly 4 per cent points to 39 per cent, while the sub-Saharan African average increased by more than 8 per cent points to 43 per cent.
The Central Bank of Nigeria this month announced it is not on track to reach its target of increasing financial inclusion to 80 per cent by 2020.
It is now reviewing the path it took in 2012 with a "refreshed strategy" and has also signed a cooperation agreement with the Nigerian Communications Commission to improve the penetration of financial services using mobile phones.
Less than 6 per cent of Nigerians use their handsets to transact using mobile money, compared with 73 per cent of Kenyans, where more than two-thirds of adults have a bank account, according to the World Bank. That's even though there are more than two phones for every bank account in the West African nation.
"We're taking baby steps when we should be running," Yomi Ibosiola, an associate director at Deloitte Nigeria's data analytics practice, said in Lagos, the commercial hub.
Cellular phone operators would invest more if they were allowed to lead the way, said Emeka Oparah, a spokesman for Bharti Airtel's Nigerian unit, which has 40 million subscribers.
"Right now, we're only providing a platform for some people to use, if it becomes our business, we will invest in it," Oparah said. The Government should adjust its policies "if it wants to move very quickly."
Fidelity Bank allows people to open an account using a mobile phone, said Chief Operations and Information Officer Gbolahan Joshua. It is also using agents to offer banking services, such as small payments and deposits, through informal branches, he said, adding the lender has 3.9 million customers.
"When you open an account on your mobile, you can receive money but you cannot make payments," Joshua said. "You need a Bank Verification Number to make transactions on that account you opened on mobile. Since the targets for financial inclusion are people that don't have BVN already, some infrastructure needs to be deployed, like mobile BVN."
There are efforts being made to remove those obstacles. One includes issuing identity numbers to 70 million people by the end of next year and pulling together the Government's various identity verification systems into a centralised database, which will make it easier for people to plug into financial services.
The central bank in March also announced an initiative that would allow the number of banking agents to increase to 500,000 within two years, from 100,000, according to estimates by Enhancing Financial Innovation & Access, a research organisation.
Most of the biggest lenders are focused on business banking. Zenith Bank, the country's largest lender with the equivalent of US$15.4 billion in assets, makes about 6 per cent of its revenue from retail banking and about 58 per cent from corporates.
There are not enough incentives for people to open bank accounts, especially among the poor, said Ameya Upadhyay, a principal in the investment team of Omidyar Network Fund Inc., which has invested in a Nigerian startup providing mobile-money services and a company that gives loans to small- and medium-sized businesses. About 87 million Nigerians live on less than US$1.90 a day, according to Vienna-based World Data Lab's World Poverty Clock.
"You have to create a 'pull' to these accounts and that happens when those accounts are meaningful to people's every day lives," he said, such as increasing the number of merchants with pay points or offering more insurance, savings or lending products. "People don't eat accounts."
Abdurrahman is also unconvinced about using his phone to transact.
"I may decide to go for mobile money if more of my suppliers have it," he said. "But for now I am very comfortable keeping cash at the shop to pay for supplies and keeping the rest at home."
- Bloomberg
