Why many Nigerians have no bank accounts –Report

A new report by MasterCard, a technology company in the payment industry, has shown why many Nigerians do not have bank accounts.

The report profiled the financially excluded and underserved in Nigeria and five other emerging markets (Egypt, India, Indonesia, Vietnam, and Philippines), providing insights into how to bring them into the economic mainstream.

The research was conducted in India, Indonesia, Vietnam, Philippines, Egypt, and Nigeria with the financially excluded (those without access to the formal banking facilities) and the underserved (those without access to any form of electronic payment).

In Nigeria, the average age of the financially underserved and excluded is 28 years old, according to the report, which adds that 91 per cent of this group have achieved secondary education or above; and 64 percent hold a job.

The report stated that the average family household income of Nigerian respondents was $200 a month.

This, according to the research, results in lower disposable income, leading 41 per cent of the group to cite “not having enough money” as the main reason for not having a formal bank account.

Other reasons were that they “don’t want or need” a bank account (17 per cent) or they felt that they needed cash on a daily basis (four per cent).

The report further stated, “Both the financially excluded and financially underserved still live within a cash economy. Instead of benefitting from bank account features like direct debits, internet banking or buying discounted goods online, the bulk of the excluded and underserved Nigerians use cash to pay for everyday items such as telecommunication (93 per cent), clothing (92 per cent), transportation (91 per cent) and food (73 per cent).

“Though cash as a payment method remains prevalent, there are strong concerns about the safety and security in carrying cash. Fifty six per cent said that the main benefit of a bank account is that it is safer than keeping cash at home. Another benefit of banks is the interest that they offer.”

The report, entitled ‘Road to inclusion,’ was commissioned by MasterCard to better understand what financial exclusion or under-service meant to the millions of people within this group, and what had triggered their choices.