Only 59% Of Nigeria’s 122.4 Million Bank Accounts Are Active – Now Telcos Are Coming For The Banks
The data says out of the 122.4 million bank accounts in Nigeria, only 59 percent of those have been used at least once in the last six month. And now the telcos smell blood.
Just recently, the Nigerian Inter-Bank Settlement System (NIBSS) released some up-to-date data on the state of bank accounts in Nigeria, and some of the revelations were both baffling and startling. But none was more so than the fact that as of June 2019, only a paltry 59 percent of the bank accounts in the country can be classified as active.
Now, 59 percent doesn’t sound bad until it starts to sink in that we are talking about a total of 122.4 million bank accounts; a far too modest proportion by all accounts. And it’s even more telling when it comes to mind that “active bank accounts”, in this context, refers to bank accounts that have been used at least once in the last six months. But maybe we always had it coming.
The decreasing percentage of active bank accounts in the Nigerian banking system has been consistent since December 2018 when the active percentage of total bank accounts dropped sharply from 66 percent in November to 60 percent in December of the same year.
By delving deeper into the data provided by the NIBSS, it would be found that active bank accounts have actually increased by 1.7 million from 71.2 million in December 2018 to 72.9 million in June 2019. On the other hand, though, inactive accounts witnessed a surge of their own, increasing by 3.1 million from 46.3 million in December 2018 to 49.4 million in June 2019.
The real picture of the state of bank accounts in Nigeria is painted by data which shows that while total bank accounts increased by 1.5 million between March 2019 and June 2019, active bank accounts dipped by over 1 million while the inactive accounts increased by 2.5 million.
The primary cause of inactivity in a large volume of Nigerian bank accounts could be attributed to the current tepid economic climate where individuals and businesses are barely surviving; something that has been blamed on the lack of effective economic policies on the part of the present administration.
As it stands, it does seem like Nigerians are slowly but surely moving away from the traditional bank accounts and this could provide an opening for novel mainstream fintech innovations. And big telcos in Nigeria are already jostling for pole position.
MTN, the largest telecommunications network company in Nigeria, is already making strides in a direction that would imply it is ready to take on the banks. Just yesterday, reports surfaced that the telco, through its subsidiary, Yello Digital Financial Services Limited (YDFS), has been granted a full Super Agent License by the Central Bank of Nigeria (CBN).
The licence will enable MTN to convert its existing airtime agents and recruit other small businesses to distribute financial services and scale the launch of its fintech strategy. In other words, MTN is looking to pull off pretty much the same thing Safaricom achieved with M-Pesa in Kenya. And there are indications that Airtel Nigeria will soon join the fray.
If all goes according to plan, Nigerian banks may soon find themselves in a titan battle to keep their customers with telcos that are just as big, or perhaps even bigger. But would the bank’s loss be the gain of the telcos? Well, it sure looks like another tale that time would have to tell.
Featured Image Courtesy: africafeeds.com
