Prostitution; Nigerian Women At Growing Risk From Human Traffickers In Germany.

Financial inclusion, savings promos yield 15m new accounts for banks

Savings account grows by 16% to 87m

Experts project further growth

By Elizabeth Adegbesan

The new bank accounts comprise 12.2 million savings accounts and 2.6 million current accounts.

Meanwhile, experts have projected further growth citing the Shared Agent Network Expansion Facilities (SANEF) initiative of the Bankers Committee and the improved economic growth as the nation sustain its recovery from economic recession.

Financial Vanguard analysis of latest Industry Customer Bank Account data released by the Nigeria Inter-Bank Settlement System (NIBSS) showed that the number of bank accounts rose to 115.2 million in November, 2018 from 100.2 million in December 2017, representing 15 million or 15 percent increase.

However, on a month-on-month (MoM) basis, number of bank accounts opened increased by 0.5 percent or 600,000 in November to 115.2 million in November from 114.6 million bank accounts at the end of October 2018.

Banking hall
Active bank accounts

A breakdown of bank accounts opened from December 2017 to November 2018 showed that the number of new savings accounts rose by 16 percent or 12.2 million to 87 million in November 2018,  from 74.6 million in December 2017.

The number of current accounts grew by 11 percent or 2.6 million to 25.16 million in November from 22.6 million in December 2017.

Further analysis also revealed that the number of active bank accounts rose by 18 percent to 74.7 million in November, 2018 from 63.5 million in December 2017.

Experts’ comment

Commenting on this development,  Divisional Head Retail Banking, Fidelity Bank, Richard Madiebo, said: “This is just one of the many things that banks are doing. There has been an increased focus on drive for savings accounts by banks, with the CBN’s various initiatives around financial inclusion, the committee of banks’ CEOs coming out with the shared agents network expansion facility and a lot of other initiatives even by the financial technology companies (Fintechs). So you would see that a lot more people are going from the informal savings account which we use to have like  ‘esusu’ and ‘ajo’ and now digitizing it and bringing it into the formal financial level. So we see that as being something that will continue over the next few weeks to months and years.

Also commenting, Dr. Uju Ogubunka, President, Bank Customers Association of Nigeria (BCAN), said: “On savings and current accounts, most of the people coming into the formal banking system, following the on-going financial inclusion promotion, may have chosen to enter the system by opening savings rather than current account. This is likely to be the case recognising the fact that the requirements for opening savings account are more liberal than those for opening current account.

Forex: Defaulters of 41 items will be banned from banking industry — Emefiele

“In addition, it is not unlikely that the awareness being created by groups like BCAN about saving for the rainy day is beginning to yield results.

On his part, Chief Executive Officer, Motion Yield Limited, Abiodun Oyelaja, attributed the growth to the nation’s gradual recovery from economic recession, and emergence of new businesses.

He said:    “The Nigerian economy has started to pick up. After the initial setbacks in the economy, the government  is now getting it right. There is an awareness about the importance    of opening bank accounts to receive funds instead of the traditional method of carrying cash around.

“In addition, many unemployed people have started realizing that, going the entrepreneur  way is the best in this country hence the springing up of small businesses on a daily basis.

Once a business is created, the next line of action is to register the business entity with Corporate Affairs Commission and then open a bank account.”

Factors driving growth in savings accounts

Explaining why savings account increased more than current account he noted: “    Traditionally, one of the features of current account is the ability to issue cheque to a third party as a mode of payment as well as ability to receive payment into a bank account through cheque. “However, at the moment, savings accounts now have similar features of ability to receive payments into the bank account through cheques.

Payment channels

“In addition, payment channels such as Automated Teller Machines (ATMs), Point of Sale (PoS), mobile banking, and internet banking have rendered the use of checking account almost useless, which makes individuals to open more savings accounts than current accounts.

“Also, charges on current accounts discourage people and make savings accounts  preferable”, he said

On his part, Chief Executive Officer, Unified Payments Services Limited, Agada Apochi said: “Savings account is essentially for individuals. If savings accounts are increasing that is a measure of confidence that Nigerians have    in the banking system. We must admit that Nigerian banks have been doing very well. If you look at it, they have been working with the CBN to reduce transaction cost. There is often the temptation of comparing the absolute number in terms of charges or fees that are charged by Nigerian banks than what is obtainable elsewhere but the truth is that the margin for Nigerian banks is lower than the margin enjoyed   elsewhere because the cost of operations,    the cost of doing business is quite high for the banks. So a higher charge by the banks in Nigeria in terms of absolute number does not mean a higher margin for Nigerian banks.

“It doesn’t mean a higher margin for the payment service providers in Nigeria because when you look at the cost of providing the service vis-a-vis the fee that is been charged the margin is quite small and that is one reason why I think people should continue to adopt banking services and electronic payments.

“The increase in the bank accounts is going to continue because banking is a habit. It is a way of life. So once people move from being excluded to being included they will understand the benefit of being included and industry operators  are also taking very conscious steps to bring more people in  to ensure  that the people who are excluded are understood and included”.

Source:https://samueljackson12.blogspot.com/2019/01/financial-inclusion-savings-promos.html