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Financial Inclusion In Nigeria




Financial Inclusion In Nigeria

Financial inclusion is the provision of a comprehensive range of high-quality financial products, such as savings, credit, insurance, payments, and pensions, which are relevant, appropriate, and affordable for the total adult population, especially the low-income sector. It is acknowledged as a potentially crucial tool for addressing poverty and inequality, producing jobs, developing wealth, and increasing welfare and living conditions for many people, notably the rural poor and the financially excluded: Financial Inclusion In Nigeria.

Many people are excluded from financial services in developing economies in various ways. For three key reasons, it is essential to include them. It makes it possible for people who are struggling financially to improve their quality of life through work. Financial service providers may gain from the expansion of the banking industry. Additionally, a nation’s economy can grow when its population have access to financial resources.

This is why the importance of financial inclusion in African economic and policy growth is gaining traction. So, to do this, banks must engage with potential clients who are not now part of the financial system.

According to the EFInA Access to Financial Services in Nigeria 2020 Survey, formal financial services such as banks, microfinance, mobile money, insurance, and pension accounts are used by 51% of Nigerian people, up from 49% in 2018. This has mainly been fueled by the expansion of banking, with 40% of Nigerians having accounts in 2018, rising to 45% in 2020. The entire financial inclusion goal was 80% by 2020; however, according to EFInA data, just 64% of adult Nigerians were financially included by that time. This indicates that 38 million adults, or 36% of Nigeria’s adult population, remain financially excluded. Meanwhile, the World Bank says financial inclusion in Nigeria grew from 45% in 2022 to 64% as of 2022, and the Central Bank of Nigeria (CBN) hopes to raise the figure to 95% by 2024.

How Is CBN Promoting Financial Inclusion In Nigeria?

In Nigeria, Telecom companies (Telcos) have shown particular interest in two of the initiatives adopted by the Central Bank of Nigeria (CBN) in its financial inclusion drive the licensing of Mobile Money Operators (MMOs) and Payment Services Banks (PSB), as they both rely heavily on the infrastructure and technology they provide.

Under the mobile money program, telecommunications companies provide the infrastructure to support message exchange for mobile payments, and PSB licensees are expected to use mobile and digital channels to deliver their services, which in turn increases financial inclusion and promotes economic activity at the local level through the provision of financial services.

Mobile Money Services

Mobile money is initiating, authorizing, and confirming a value transfer from a current/checking, savings, or stored value account via a mobile phone. Some observers believe that the current legislative system, which prohibits Telcos from acting as “the lead initiator” even in the non-bank-led model, is to blame for the low success rate of mobile money services in Nigeria. This argument is based on the observation that countries, where telcos have assumed the initiative in service offering have seen the most success with the uptake of mobile money services in Africa.

Since 2011, the CBN has granted licenses to 21 mobile money companies in Nigeria (MMOs). According to reports, mobile money transactions increased by 50% between January and September 2018 to a total of NGN1.2 trillion, compared to NGN795.18 billion during the same time in 2017.

Additionally, it has been stated that the number of mobile money users has climbed from 3.2 million in 2017 to 5.54 million in the same period in 2018. The leading payment platform for the digital economy in many emerging areas, according to sources, is MMOs, which have transactions worth over US$1 billion per day globally and have over 690 million registered users in 90 countries.

The CBN acknowledges the significance of telecommunications in running the mobile money scheme given the necessity of the infrastructure they provide but feels compelled to prohibit the telco-led option to maintain complete control over the operations of monetary policy, reduce risks, and ensure that the provision of financial services is led by entities that have been granted licenses by it. As a result, telcos are limited to offering telecom network infrastructure to mobile money carriers.

Payment Service Banks

The CBN published the Guidelines for Licensing and Regulation of Payment Service Banks in Nigeria by its statutory powers. According to the Guidelines, licensees must “leverage on mobile and digital channels to expand financial inclusion and boost economic activity at the grassroots level through the supply of financial services.”

The PSBs must “facilitate high-volume, low-value transactions in remittance services, micro-savings, and withdrawal services in a secured technology-driven environment to further deepen financial inclusion and help attain the policy objective of a 20% exclusion rate by 2020,” according to the PSBs’ mandate. Therefore, those without bank accounts, those who are underserved, and those who are financially excluded are the main goals of PSBs.

The list of authorized PSB promoters includes banking agents, Telcos via subsidiaries, retail chains (supermarkets, downstream petroleum marketing companies), postal (FinTechs), financial holding companies, and any other service providers, courier companies, MMOs, switching companies, financial technology companies entity on the merits of its application subject to the approval of the CBN.

The CBN may, from time to time, specify a different sum as the minimum capital requirement for a PSB, which is NGN5 billion (about US$13 million). To reach those financially excluded, PSBs are expected to operate primarily in rural areas and other places without banks, with at least 25% of their financial service touch points. They can establish direct business relationships with card scheme operators, set up agent networks, deploy point-of-sale systems, and hire agents. They must also be technologically advanced and follow industry standards for data storage, security, and integrity.

How Are Nigerian Banks Promoting Financial Inclusion?

Product Development

Banks in Nigeria are creating solutions exclusively for customers who are financially excluded. These include “tier 1” bank accounts and personal customers’ first accounts. A passport photo and a bank verification number are required to open the account. Small business entrepreneurs can also get loans from microfinance institutions.

Loans, credit options, and grants are also made available to women working in the unorganised sector, including those doing small commerce, street hawking, and selling food. These loans frequently feature low-interest rates to be affordable to persons with low incomes and to promote the expansion of businesses run by women.

Financial vulnerability might have a disability component. An estimated 25 million people in Nigeria are disabled, and some banks have a reserved product to offer these persons to promote their financial capacity.

Product Marketing

Although digital services and marketing are becoming more prevalent in banking, traditional marketing techniques are still necessary to attract new clients. Nigerian banks know that these clients may not always use social media or other technological tools. The three main languages, Hausa, Igbo, and Yoruba, are operated by banks in radio campaigns and commercials to reach their target consumers in the country’s rural areas.

Another marketing technique that banks employ to target these clients is called “market storm.” To draw traders and customers during market storms, bank employees enter a market or other public setting with music and entertainment.

Adoption Of Technology

Nigerian banks understand the importance of technology in reaching out to unbanked, underbanked, and low-income customers. These clientele segments hardly ever use social media. However, they frequently converse via text messages as part of their regular routines. To communicate with customers, banks use text messages and USSD codes. To start an account, send money, pay bills, and apply for loans, type the numbers and symbols into any mobile phone, whether it has internet access or not.

Another way Nigerian banks interact with their customers is through mobile money agents. Banks provide these representatives with mobile point-of-sale equipment to assist bank customers.

Financial Inclusion And Gender In Nigeria

Financial inclusion also has a particular gender component. In a 2019 poll conducted in Nigeria by EFINA, women were more likely to experience financial exclusion (36% and 24% for men). It is also noteworthy that Nigeria has lagged behind less populous counterparts like Kenya, South Africa, Tanzania, and Uganda in closing the gender gap in access to financial services.

The gender element of financial inclusion is essential. Women were more likely to experience financial exclusion in a 2019 poll performed in Nigeria by EFINA (36%  24% for men). In reducing the gender gap in access to financial services, Nigeria has fallen behind less populous rivals like Kenya, South Africa, Tanzania, and Uganda.

Financial Inclusion And Youth In Nigeria

Nigeria has a youthful population, yet many of its youths, like its female populace, are financially excluded. Young adults between the ages of 18 and 35 are substantially more likely to be financially excluded than older adults, according to EFINA’s projections. Out of the estimated 56.7 million young people, only 21.5 million, according to a report by EFINA, have bank accounts as of 2018. The relationship between youth financial exclusion and other socioeconomic problems, including youth unemployment and underemployment, is also evident. See


Financial inclusion is a powerful tool that can drive a nation to prosperity because it improves the financial capacity and capability of the populace, which in turn promotes economic growth. Therefore, it is important for the Nigerian government, through the CBN, to give financial inclusion its undivided attention.

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Rand Merchant Bank (RMB) works with World Bank in closing first to market MIGA guaranteed short-term sovereign loan



Rand Merchant Bank (RMB) works with World Bank in closing first to market MIGA guaranteed short-term sovereign loan

Through collaboration with MIGA and the Minister of Economy and Finance for Côte d’Ivoire, RMB facilitated a short-term loan to support crucial trade related initiatives

Rand Merchant Bank (RMB) (, a division of FirstRand Bank Limited, has achieved a significant milestone in Africa by partnering with the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank, to extend short-term funding support on a trade-backed facility for the Republic of Côte d’Ivoire.

Through collaboration with  MIGA and the Minister of Economy and Finance for Côte d’Ivoire, RMB facilitated a short-term loan to support crucial trade related initiatives.

Said Ben Bechet from RMB’s Trade and Working Capital, Structured Solutions team: “While RMB has a proud history of supporting sovereigns on the continent with their funding and capital markets requirements, this is a first of its kind facility for an African sovereign. This transaction will pave the way for further MIGA guaranteed short-term facilities across the continent to assist with developmental initiatives, critical projects and the importation of crucial goods such as food, fertilizer and medicines alongside other resources.”

Clarine Stenfert, Global Trade Finance Head and Head of UK for MIGA, said: “Through deep collaboration with RMB and MIGA, the teams were able to successfully structure and execute a process we hope to scale and introduce to other African countries. MIGA’s Trade Finance Guarantee Framework seeks to support sovereigns or sub-sovereigns across emerging markets with their trade financing requirements, alleviating the current liquidity constraints imposed by the current high inflationary environment and the retreat from markets by private sector players.”

MIGA provides political risk insurance guarantees to private sectors and investors in a broad range of sectors in developing  economies. MIGA promotes foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance guarantees and credit enhancement to private sector investors and lenders.

“RMB’s strategy entails forging partnerships with insurance, guarantee and export credit agency providers to extend meaningful funding support to our clients across Africa. Collaboration with development financial institutions and multilaterals remains key to truly unlocking new opportunities to support our clients, concluded Bechet.”

Distributed by APO Group on behalf of Rand Merchant Bank.

About RMB:
Rand Merchant Bank (RMB) is a leading African corporate and investment bank (CIB) and part of the largest financial services group (by market capitalisation) in Africa – FirstRand Bank Limited (which is wholly owned by FirstRand Limited). We offer our clients innovative, value-added advisory, funding, trading, corporate banking, and principal investing solutions.
With a presence in 10 African countries, we have a significant footprint on the continent. We also have access to a network of retail banks, representative offices and branches across Africa, the UK, India and the US.

At RMB we are passionate about solving problems for our clients by asking the hard questions. We challenge accepted thinking. We analyse and seek solutions beyond the obvious. We are innovative in our thinking and turn challenges into opportunities, while delivering on Traditional values. Innovative ideas. Our ability to think differently, our collaborative spirit, our client-centric solutions and our belief that great minds don’t always have to think alike, is what sets us apart.

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About MIGA:
MIGA was created in 1988 as a member of the World Bank to promote foreign direct investment in emerging economies by helping to mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and offering credit enhancement to private investors and lenders. Since its creation, MIGA has issued over $76 billion in guarantees across 123 developing countries, supporting more than 1,000 projects. Over the past decade, MIGA’s guarantees have generated more than 156,000 jobs in developing countries.

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Equatorial Guinea and Ghana Accede to the Establishment Agreement for Afreximbank’s Fund for Export Development in Africa (FEDA)



The Fund for Export Development in Africa (FEDA), the development impact-focused subsidiary of the African Export-Import Bank (Afreximbank) (, has announced that the Republic of Equatorial Guinea and the Republic of Ghana have recently signed the FEDA Establishment Agreement.

This important milestone is the result of several months of cooperation between Afreximbank, FEDA and government officials in Equatorial Guinea and Ghana.

As Afreximbank member states, Equatorial Guinea and Ghana have taken another step towards closer collaborations with FEDA by signing the FEDA Establishment Agreement. This milestone marks the countries’ support for Afreximbank’s efforts to extend FEDA’s impact investing objectives across the continent.

New memberships are crucial to broaden the scope of FEDA’s interventions and its mission of delivering long-term capital to African economies with a focus on industrialization, intra-African trade and value-added exports.

Professor Benedict Oramah, President of Afreximbank and Chairman of the Boards of both Afreximbank and FEDA, said: “We heartily welcome the signing of the FEDA Establishment Agreement by the Republic of Equatorial Guinea and the Republic of Ghana. The signing of the FEDA Establishment Agreement lays the groundwork for an enhanced and more effective cooperation with better access to the full range of interventions offered by Afreximbank and FEDA. This milestone builds on the solid partnership already established with both Equatorial Guinea and Ghana. The aim is to support transformative investments in these countries in the near future.”

About FEDA:
The Fund for Export Development in Africa (“FEDA”) is the impact investment subsidiary of Afreximbank set up to provide equity, quasi-equity, and debt capital to finance the multi-billion-dollar funding gap (particularly in equity) needed to transform the Trade sector in Africa. FEDA pursues a multi-sector investment strategy along the intra-African trade, value-added export development, and manufacturing value chain which includes financial services, technology, consumer and retail goods, manufacturing, transport & logistics, agribusiness, as well as ancillary trade enabling infrastructure such as industrial parks.

About Afreximbank:
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. For 30 years, the Bank has been deploying innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Working with the AfCFTA Secretariat and the AU, the Bank is setting up a US$10 billion Adjustment Fund to support countries to effectively participate in the AfCFTA. At the end of September 2023, Afreximbank’s total assets and guarantees stood at over US$33.4 billion, and its shareholder funds amounted to US$5.8 billion. The Bank disbursed more than US$104 billion between 2016 and 2023. Afreximbank has investment grade ratings assigned by GCR (international scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB). Afreximbank has evolved into a group entity comprising the Bank, its impact fund subsidiary called the Fund for Export Development Africa (FEDA), and its insurance management subsidiary, AfrexInsure, (together, “the Group”). The Bank is headquartered in Cairo, Egypt.

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Financial Analysis: A Comprehensive Study of The Well-Being of A Country 




Financial Analysis: A Comprehensive Study of The Well-Being of A Country

Understanding the financial stability of a country requires a thorough understanding of financial analysis. In order to offer insights into the overall financial stability and overall wellness of the country, it entails evaluating a range of economic indicators, financial performance, and market movements.

In this article, we will delve into the fundamentals and importance of financial analysis in evaluating a country’s economic situation.


Ancient Beginnings:

The roots of financial analysis can be traced back thousands of years. The ancient Mesopotamians, Egyptians, and Greeks were among the pioneers of documenting financial transactions, creating basic records of assets and liabilities. These early attempts laid the groundwork for the concept of financial analysis through the study of financial statements and ledgers.

Medieval Europe:

During the Middle Ages, Europe witnessed the rise of merchant guilds and the emergence of double-entry bookkeeping. Italian mathematician and Franciscan friar, Luca Pacioli, is often credited with formalizing double-entry bookkeeping, publishing his seminal work “Summa de arithmetica, geometria, proportioni et proportionalita” in 1494. The concept of balancing debits and credits within financial records formed the basis for modern financial analysis techniques.

Industrial Revolution:

The Industrial Revolution in the 18th and 19th centuries revolutionized business and the need for financial analysis grew rapidly. As companies expanded and diversified, investors began demanding more comprehensive financial reports to assess the potential risks and returns of their investments. The birth of limited liability companies further accelerated the need for financial analysis, as shareholders sought transparency in the performance of their investments.

Modern Era:

The 20th century witnessed significant advancements in financial analysis techniques. The advent of electronic computing in the mid-1900s enabled the processing and analysis of vast amounts of financial data, leading to the development of sophisticated financial models and ratios.

The Great Depression of the 1930s laid the groundwork for modern financial analysis as regulators sought effective ways to prevent future economic crises. The establishment of the U.S. Securities and Exchange Commission (SEC) in 1934 brought about standardized reporting requirements, including the filing of audited financial statements. This increased transparency and standardized financial reporting provided analysts with a more accurate and consistent basis for their analysis.

The Rise of Quantitative Analysis:

In the latter half of the 20th century, the growth of computing power and the availability of large data sets propelled financial analysis into new territory. Quantitative analysis, utilizing statistical models and mathematical algorithms, started gaining prominence. Financial analysts began incorporating complex mathematical methods to assess investment opportunities, risk management, and portfolio optimization.

Modern Financial Tools:

With the advent of the internet and the digital age, financial analysis has become even more accessible and data-driven. Sophisticated software programs, data analytics tools, and artificial intelligence have revolutionized the way financial data is analyzed and interpreted. In recent years, technologies like machine learning have been leveraged to develop predictive models that can assess future trends and make accurate financial forecasts.


Financial analysis is the process of evaluating businesses, projects, budgets, and other finance-related transactions to determine their performance and suitability. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to warrant a monetary investment.

Financial analysis is a fundamental tool that allows organizations and individuals to assess the past, present, and future financial health of a business or investment. Through a systematic examination and interpretation of financial statements, ratios, and other key indicators, financial analysis helps in making informed decisions, optimizing resources, and improving overall financial performance. In this article, we will delve into the meaning of financial analysis, its prominent components, and its significance across various sectors.

Financial analysis involves scrutinizing financial data to evaluate the performance and profitability of an entity. It assists in quantifying the effectiveness of financial decisions, identifying trends, predicting future outcomes, and benchmarking against industry standards. By analyzing financial statements, investors, analysts, and other stakeholders gain valuable insights into the financial position, liquidity, solvency, and operational efficiency of an organization.


  1. Gross Domestic Product (GDP): GDP is a primary indicator used to gauge the economic performance of a nation. Financial analysts analyze GDP growth rates and its components, such as consumer spending, government expenditure, investments, and net exports. This analysis helps in determining the overall strength of the economy and identifying areas of potential growth.
  2. Trade and Balance of Payments: Trade analysis focuses on a country’s imports, exports, and balance of payments. Evaluating trade patterns helps identify sectors driving the country’s economic growth, trade imbalances, and potential risks to the economy from external factors such as changes in global demand or disruptions in supply chains.
  3. Inflation and Interest Rates: Analyzing inflation rates and interest rates provides insights into the stability of a country’s economy. High inflation erodes purchasing power, while high-interest rates can impact borrowing costs, affect consumer spending, and investment behavior. Financial analysts assess the impact of inflation and interest rates on an economy’s overall competitiveness and economic growth potential.
  4. Government Debt and Fiscal Policy: Analyzing a country’s government debt levels and fiscal policy is crucial in understanding its financial sustainability. A high level of government debt may lead to increased borrowing costs, reduced investor confidence, and potential risks to economic stability. Evaluating fiscal policies helps determine whether a country is managing its finances effectively and implementing sustainable economic growth strategies.
  5. Stock Market Performance: The stock market reflects investor sentiment and provides valuable insights into a country’s economic outlook. Analysts evaluate key stock market indices, such as the country’s primary exchange, sector-specific indices, and market capitalization trends. Monitoring stock market performance allows for an understanding of investor confidence, economic growth expectations, and potential risks to the financial system.
  6. Banking Sector and Financial Institutions: A robust banking sector is essential for economic stability. Financial analysts assess the health of the banking system by evaluating indicators such as non-performing loans, capital adequacy ratios, and the overall stability and soundness of financial institutions. Understanding the well-being of financial institutions helps gauge the potential risks to the overall economy, including credit availability, liquidity, and financial contagion.
  7. Regulatory Environment and Governance: The regulatory environment and governance play a critical role in attracting investment and fostering economic growth. Financial analysts assess the effectiveness of regulatory frameworks, transparency in financial transactions, and the overall credibility and efficiency of institutions responsible for enforcing regulations. Evaluating the regulatory environment aids in understanding potential risks and opportunities for sustainable economic development.


Financial analysis plays a vital role across various sectors, serving the following purposes:

  1. Evaluating Financial Performance: By conducting a comprehensive financial analysis, companies can assess their performance, profitability, and financial stability. This, in turn, helps in identifying areas for improvement, developing strategic plans, and making sound financial decisions.
  2. Assessing Investment Viability: Investors rely on financial analysis to evaluate the profitability and risks associated with potential investments. Through detailed scrutiny of financial data, investors can determine the financial health and growth prospects of a company, aiding in making informed investment decisions.
  3. Facilitating Lending Decisions: Financial institutions utilize financial analysis to assess the creditworthiness of loan applicants. By analyzing financial statements, evaluating ratios, and assessing the risk profile, lenders can ascertain the borrower’s ability to repay loans and make sound lending decisions.
  4. Supporting Strategic Decision-Making: Financial analysis aids in strategic decision-making, such as expansion, diversification, or mergers and acquisitions. Understanding a company’s financial position and performance provides a foundation for evaluating the feasibility and potential outcomes of such decisions.


Conducting a comprehensive financial analysis provides valuable insights into the economic landscape of a country. By evaluating indicators such as GDP, trade patterns, inflation rates, government debt, stock market performance, banking sector health, and regulatory environment, financial analysts can gauge the overall financial health, identify potential risks, and recommend strategies for sustainable economic growth. Accurate and timely financial analysis acts as a compass, guiding policymakers, investors, and businesses to make informed decisions and contribute to the overall prosperity of the nation.

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