The IMF has disclosed that Nigerian banks closed 234 branches and 649 Automated Teller Machines (ATMs) in 2020 leading to a decline in the country’s Financial Access Score (FAS) to 4.44 compared with a score of 4.78 in 2019.
In a report released on November 1, 2021, Financial Access Survey 2021 Trends and Developments, the Fund noted that generally, “there was considerable expansion in the usage of digital financial services during the pandemic, while usage of traditional financial services remained stable.”
According to the report, the international community uses two main FAS indicators to monitor the Target 8.10 of the 2030 Sustainable Development Goals (SDGs) which aims at strengthening the capacity of domestic financial institutions to expand access to banking and financial services.
The two FAS indicators are Number of Commercial Bank Branches per 100,000 Adults and Number of ATMs per 100,000 Adults.
Based on the report, Nigeria recorded declines in the two critical FAS indicators and 12 other indicators among the 64 indicators measured by the FAS. This was due to the decline in the number of commercial bank branches in Nigeria to 5,158 in 2020 from 5,392 in 2019.
Consequently, the Number of Commercial Bank Branches per 1,000 km2 in Nigeria fell to 5.94 in 2020 from 5.68 in 2019. In terms of Number of ATMs per 100,000 Adults, the country’s Financial Access score fell to 17.19 in 2020 from 16.14 in 2020.
According to the Fund, the reduction was due to the fall in the number of ATMs in Nigeria by 649 to 18,810 in 2020 from 19,459 in 2019. Also, the Number of ATMs per 1,000 km2 in Nigeria fell to 20.65 in 2020 from 21.36 in 2019.
Results for other indicators determining FAS score
Other relevant indicators presented by the IMF also reflected the extent of financial access in the country. For instance, the Number of borrowers with commercial banks recorded an increase from 25.62 in 2019 to 29.61 in 2020. Outstanding deposits with commercial banks as a percentage of GDP grew from 16.31 per cent in 2019 to 20.50 per cent in 2020.
The IMF report also showed a sharp decline in the number of registered mobile money agent outlets in Nigeria to 129,154 in 2020 from 145,800 in 2019, representing 11 per cent decline. The value of mobile money transactions shot up to 9.72 per cent in 2020 from 3.04 per cent in 2019.
The Fund noted that loans to Small and Medium Entreprises (SME’s) were central to many countries’ economic activity. However, these businesses tend to be vulnerable given the constraints they face in accessing finance. From the IMF data, the outstanding SME loans from commercial banks remained the same for 2019 and 2020 at 0.01 per cent.
On the whole, 165 countries submitted data to the FAS. The Fund said the number of jurisdictions reporting gender-disaggregated data increased to 71— a 10% increase from the previous round. The number of mobile money reporters also grew to 83— roughly 90% of countries with live mobile money services.