Banking agents increased by 517% last year – CBN
The number of banking agents (third party retail outlets contracted by financial institutions to process clients’ transactions) rose from 38, 416 agents in December 2018 to 236,940 agents as of December 2019.
This growth in the burgeoning segment amounts to a 517 per cent increase in a year. It had earlier ballooned by over three folds to surpass 38,000 agents between 2017 and 2018.
The information is contained in the 2019 National Financial Inclusion Strategy (NFIS) document released by the Central Bank of Nigeria (CBN) yesterday.
NIFS was established eight years ago to provide a strategic framework to reduce the percentage of adult Nigerians without access to financial services from 46.3 per cent it stood in 2010 to 20 per cent this year.
The apex bank listed barriers to financial inclusion to include distance, eligibility, low financial literacy, poverty, and high cost of service. It noted that the challenges were being circumvented by aggressive digital, mobile, and agent banking approaches.
The agent banking campaign has led to phenomenal adoption in recent years. The number of agents ballooned from 11,104 or 10.7 agents per 1000 adult Nigerians in 2017 to 38,416 (38.6 agents per 1000 adults) in 2018.
Last year, the figure jumped further to 236,940 (228.8 agents per 1000 adults).
“There were 236, 940 unique agents spread across the 774 local government areas in Nigeria as of December 2019. This was higher than the number of agents in 2018 at 83,560 (excluding 38,416 agents not under Shared Agent Network Expansion Facilities (SANEF) supervision). SANEF also onboarded two additional licensed super agents within the period, bringing the total number to nine super agents in December 2019. SANEF was able to increase the number of financial access points to serve the excluded population – from 84 agents per 100,000 adult population in December 2018 to 237 agents per 100,000 as of December 2019,” the document explained.
The Guardian had earlier reported that agent banking had become the new competitive edge in retail banking with leading players offering bonuses to boost their share in the fast-growing market.
The document by the central bank said agent banking is a key driver of efforts to increase financial inclusion. While the number of agents is growing at the speed of light, point of sale (PoS), which is expected to lead in the campaign for a cash economy, declined last year. The new CBN strategy document said the number PoS machines fell from 2018’s 217,283 to 186,774 units in 2019.
“As of December 2019, the total number of commercial bank branches and cash centres was 5,432 from the previous year’s figure of 5,464. Therefore, the number of deposit money bank (DMB) branches per 100,000 adults were 5.25 in 2019 lower than 5.39 in 2018. The decline could be attributed to the increased use of electronic and branchless channels for financial service delivery,” the report added.
On the contrary, the number of microfinance bank outlets reportedly increased by 88, to hit 2,132 as of last December. With the increase, 1000 adult Nigerians were, as of last year, serviced by approximately 2.06 microfinance business centres. The apex’s bank target was 4.9 outlets per 1000 adults.
According to the report, insurance and pension penetration remained below targets. It reported a total of 1.6 million valid insurance policies as of the end of 2019.
“Insurance penetration remained below the target of 36.2 per cent set for 2019. The available data shows that there were a total of 1.6 million valid insurance policies at the end of 2019. Out of this figure, life insurance recorded 1.2 million policies, and motor insurance recorded 249,110 policies. Others are general accidents (67,601), fire insurance (39,371), and ‘other policies’ (38,928).
“Pension penetration also remained below the year’s target. A total of 8,891,236 retirement savings accounts were recorded as of December 2019 in a population of about 103 million adults. Micro-pension guideline, which aims to offer pension services to the organised informal sector, was implemented in 2019. Little uptake was recorded in the Micro pension sub-sector as only 47,000 accounts were registered,” the document stated.