Only 20% of Nigeria's population in banking system, says KPMG

A foremost audit, financial and tax advisory firm, KPMG has disclosed that only about 20 per cent of the population is banked.

This was contained in its report titled: 'Africa Banking Industry Customer Satisfaction Survey,' for April 2013, where it stated that two-thirds of the country's population 'have never banked at all before.'
According to the report, the Nigerian banking industry is made up of 20 banks with nearly 6,000 branches, most of which are concentrated in the urban areas, adding that it is the concentration of banks in urban areas as a factor that contributes to the low level of banking penetration.

'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,' it said.

KPMG further stated that 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),' it added.