The Nigerian banking system witnessed a significant surge in active accounts in 2024, reaching 311.65 million by December. This represents a remarkable 48.89% increase from the 209.31 million active accounts recorded in January of the same year, effectively adding over 102 million new active accounts within the 12-month period. This growth signifies a positive trend towards greater financial inclusion within the country, building upon the 202.6 million active accounts reported at the end of 2023. While this growth is encouraging, it’s crucial to analyze it alongside the concurrent rise in dormant and closed accounts to gain a comprehensive understanding of the evolving financial landscape.
The increase in active accounts aligns with global efforts to promote financial inclusion, recognized as a key driver of economic development. The World Bank highlights access to transaction accounts as a fundamental step towards broader financial inclusion, allowing individuals to manage their finances effectively. Nigeria’s progress, while notable, still lags behind the global average. While global account ownership increased from 51% to 76% between 2011 and 2021, Nigeria saw growth from 30% to 45% during the same period. This indicates the need for continued efforts to bridge the gap and ensure that more Nigerians benefit from formal financial services.
While the rise in active accounts is encouraging, the data also reveals an increase in both dormant and closed accounts. Dormant accounts rose by 6.52% to reach 19.69 million by December 2024, while closed accounts increased by 17.40% to 25.48 million during the same period. This concurrent increase warrants further investigation. The reasons behind account dormancy and closures need to be understood to ensure the sustainability of financial inclusion efforts. Factors such as account maintenance fees, lack of access to convenient banking services, or a shift towards alternative financial platforms could contribute to these trends.
Nigeria’s pursuit of financial inclusion dates back to 2012 with the adoption of the National Financial Inclusion Strategy (NFIS) by the Central Bank of Nigeria (CBN). This strategy aimed to address demand-side, supply-side, and regulatory barriers to financial inclusion. Key focus areas included agency banking, mobile banking/mobile payments, linkage models, and client empowerment. The NFIS also prioritized developing guidelines and frameworks for tiered Know Your Customer regulations, agent banking regulations, the National Financial Literacy Strategy, and consumer protection. These initiatives are critical for building a robust and inclusive financial system, ensuring that financial services are accessible, affordable, and safe for all Nigerians.
The 2023 EFInA Access to Finance Survey corroborated the growth in financial inclusion, reporting a rise from 68% in 2020 to 74% in 2023. However, the survey also highlighted persistent disparities, particularly concerning gender, urban-rural divide, youth inclusion, and regional disparities, specifically in Northern Nigeria. While the gender gap saw improvement, with women’s financial inclusion rising from 60% to 70%, the actual gap widened from 8% to 9%. The urban-rural gap decreased from 24% to 20%, and youth (18-35) recorded 71% financial inclusion. Addressing these persistent gaps requires targeted interventions and strategies to ensure equitable access to financial services for all segments of the population.
The Central Bank of Nigeria recognizes the transformative potential of financial inclusion, particularly for empowering small and medium-sized enterprises (SMEs), women, and vulnerable populations. CBN Governor Olayemi Cardoso emphasized the importance of financial inclusion for economic development at the 2024 International Financial Inclusion Conference. The CBN is committed to promoting financial inclusion through frameworks aimed at closing gender gaps and supporting digital platforms that enhance access to financial services. Furthermore, the CBN is actively promoting financial literacy initiatives among young Nigerians to foster entrepreneurship and stimulate economic growth. The increasing adoption of digital payment channels, driven by mobile technology penetration, provides a unique opportunity to expand financial access across the country. Interoperable payment platforms have enabled millions of Nigerians to engage with financial services even without traditional bank accounts, signifying a crucial step towards a more inclusive financial ecosystem.
