Although usage of mobile phones increased to 93 percent (103 million) in 2023 from 90 percent in 2020, S&P Global Ratings says the number of registered mobile money accounts is still lower in Nigeria than in countries such as Ghana and Kenya.

The adoption of financial service agents skyrocketed, from 4.4 percent in 2018 to 54 percent in 2023 and the number of registered mobile money accounts per 1,000 Nigerian adults rose by 18.1 percent within a year as of November, 2023.

In a report released this January 2024, S&P Global Ratings said that financial technology (fintech) will close the gap of financial exclusion and literacy in the next five years in Nigeria, where roughly 50 percent of the population is formally banked and the financial exclusion rate (measuring those without a bank account) is nearly 40 percent.

Similarly, the number of registered mobile money accounts per 1,000 Nigerian adults rose by 18.1 percent within a year, according to a report in November by the International Monetary Fund (IMF).

The report showed that mobile money accounts increased to 225.9 in 2022 from 191.0 in 2021. The number of mobile money agent outlets per one thousand kilometres square also grew to 1,618.6 from 680.9.

The value of mobile money transactions as a percentage of the Gross Domestic Product (GDP) grew to 16.11 percent from 8.74 percent.

“This means to access finance have been rapidly changing in recent years, with traditional financial access points such as ATMs and bank branches gradually declining while non-traditional access points such as retail agents and mobile money agents are growing rapidly,” the report said.

It said in middle-income economies, the number of retail agents and mobile money agents combined more than doubled between 2019 and 2022 while the number of ATMs and bank branches declined by nine percent over the same period.

According to S&P, the country’s citizens are among early adopters of cryptocurrency as their preferred payment and savings vehicles.

The strategic shift to digital banking accelerated Nigerian banks’ scale and supported profitability through volatile economic cycles. Commercial banks, while being kept out of cryptocurrency transactions, have made steadfast progress in deepening their reach and offering new products and services to foster financial inclusion.

“With 70 percent of the population younger than 30, Nigeria’s demographics, entrepreneurial spirit, and nascent digital ecosystem are great catalysts for growth if the population can benefit from access to improved technology infrastructure,” said S&P Global Ratings credit analyst Samira Mensah in the report, entitled, “Tech Disruption in Retail Banking: Regulation and Infrastructure Development Can Help Nigeria’s Retail Banks Fend Off Fintechs.”

While mobile penetration is high, at close to 100 percent in 2023, only half the population has broadband access and about a third a smartphone.

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