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It appears the goal of the Central Bank of Nigeria achieving a 20 percent financial exclusion target in the year 2020 is being derailed by the tough economic conditions in the country as 3.2 million adult Nigerians who hitherto had access to financial services in 2014 backed out in 2016.
An EFInA “Access to Financial Services in Nigeria 2016 Survey” revealed that the financial exclusion rate rose to 41.6 percent in 2016 from 39.5 percent in 2014. According to the survey, 40.1 million of Nigeria’s 96.4 million adults were financially excluded in 2016 compared to 36.9 million adults in 2014. Household consumption equally fell year on year in real terms, by 1.05 percent in the first quarter of 2016, and by 6.00 percent in the second quarter of the same year.
In 2012, the Central Bank of Nigeria developed a financial inclusion strategy that sought to increase the formal use of financial services in Nigeria from 36 percent to 70 percent and cut down on the number of the financially excluded, which was roughly more about 50 percent of Nigerians to just 20 percent in 2020.
But hardly had they started the implementation than the prices of oil crashed and recession kicked in. The banks were seriously affected as they were overexposed to the oil sector. The government was also cash-strapped and needed money to finance its budget.
Then, the financial inclusion strategy was jettisoned to cushion the effects of recession. The CBN not only introduced an account maintenance fee (a surreptitious reintroduction of the already suspended CoT charge through the back door.)
Similarly, the government imposed a compulsory stamp duty charge of N50 on all bank customers for bank transactions in the country.
But that is not all. The banks have turned on the savings of its customers to shore up their badly depleted revenues. Charges such as ATM withdrawal, SMS and email alert fees, inter-bank transactions fees, even on banks’ internet platforms etc were introduced or reintroduced and vigorously collected. Some banks became even more zealous and extended the stamp duty charge to all accounts and transactions instead of current accounts as was directed by the apex bank.
Although the apex bank had directed the banks involved to make a refund to their customers, Heard on the streets learnt only one bank had partially complied.
Of course, many Nigerians who have been badly affected by the recession and inflation and have less disposal cash and less savings are being discouraged from patronising the banks or using formal financial services as provided by the banks.
What is worse and bad news for financial inclusion is that Nigerians being targeted for inclusion are the most sensitive to the imposition of such arbitrary charges.
Petty traders and those in operating in the informal economy therefore prefer to conduct other means of banking such as market union’s thrift societies and esusu than patronising the banks.
Even formal sector workers now rush to the banks to withdraw their entire salary once they receive an alert. It is understood that if this is not done, the banks will go on deduction spree on the accounts.
CHRISTOPHER AKOR
