It is a known fact that Nigeria is Africa’s most populous country, but with just approximately 20 percent of its population seen in the banking sector. This was disclosed by Klynveld Peat Marwick Goerdeler (KPMG).
The foremost recognised audit, financial and tax advisory firm, stated this in a report titled: ‘Africa Banking Industry Customer Satisfaction Survey,’ for April 2013. It revealed that “two-thirds of the country’s population have never banked at all before.”
Last year, the Central Bank of Nigeria launched the Financial Inclusion Strategy (FIS), to improve and increase access to financial services.
The creation of FIS is an orchestrated attempt to lure people into banking through increasing access of financial services such as payments, and savings. The apex bank had identified lack of access to financial services as a challenge to the country’s growth.
The KPMG proceeded by pointing out a certain factor which affects the level of banking penetration; with a break down of 20 banks and about 6,000 branches making up the industry, most of which are concentrated in the urban areas. It identified the lack of much banks in rural areas to contribute to the low percentage of Nigerians participating in banking system.
It explained: “Nigeria’s banking sector is expected to grow from about $117 billion in 2011 to more than $168 billion in 2015 (a CAGR of around 10 per cent). The sector has recently experienced a number of regulatory changes including a repeal of universal banking licenses and the promulgation of more stringent regulations by the country’s central bank which is aiming to reduce soaring books of non-performing loans and stamp out severe breaches of corporate governance.
“However, with the establishment of the Asset Management Corporation of Nigeria (AMCON) to purchase toxic assets of banks and recapitalise troubled banks, some stability has returned to the sector.
Leading rating agency, Standard & Poor’s (S&P) to upgrade the sector in 2012 to a positive outlook due to the country’s improved asset quality, capitalisation and corporate governance.”
With 77.9 per cent, the report ranked Guaranty Trust Bank Plc emerged top among the first 10 ‘Most Customer-focused Banks’ in the country. It was closely followed by Zenith Bank Plc with 77.7 per cent and Stanbic IBTC with 76.1 per cent. Others on the list were Diamond Bank (75.7 per cent), Fidelity Bank (75 per cent), Standard Chartered (74.8 per cent), First City Monument Bank Plc (74.4 per cent), Sterling Bank (73.9 per cent) and Access Bank (73.1 per cent).
“With ATMs becoming almost ubiquitous in Nigerian cities, it is not surprising that it has been the fastest growing channel in recent years. Almost eight in 10 customers surveyed use the ATM and nearly two thirds of these people visit an ATM on a weekly basis with cash withdrawal and balance enquiry amongst the most common transactions customers perform via the ATM.
“However, despite the proliferation of new channels in recent years, our findings show that adoption of other alternate channels is still comparatively low with very few respondents saying they use internet banking (7 per cent), Point of Sale (PoS) (6 per cent), telephone banking (5 per cent) and mobile payments (2 per cent),” the report added.