Despite the huge numbers of Microfinance Banks, MFBs, operating in the country and regulatory authorities’ efforts to use them as channels for financial inclusion, investigations have confirmed that only 2.6 million of the adult population had MFB accounts.
According to the National Financial Inclusion Strategy (NFIS) target for MFBs, by 2020 there should be five branches of MFBs per 100,000 adults.
However, latest study by Enhancing Financial Innovation & Access, EFInA, a financial sector development organisation that promotes financial inclusion in Nigeria, indicated that apart from the low patronage of MFBs by the adult population, the most commonly used micro finance product remained the savings account.
SOURCE: National Mirror (Nigeria)
The study titled ‘The Landscape of Financial Inclusion and Microfinance In Nigeria’ is based on a total adult population of 93.5 million out of whom 80.6 per cent of those who have a MFB product, owning a savings account.
The survey, which was conducted in 2014 and released at the end of March this year, stated that of the 2.6 million adults, 2.8 per cent of total adults, that have a MFB account, 53.9 per cent were male and 46.1 per cent were female.
On the criteria for choosing a MFB by the 2.6 million adults, the top three criteria were proximity of the micro finance branch to their home/workplace, 29.9 per cent, getting a loan, 25.2 per cent, and word of mouth, 19.7 per cent.
Other reasons given are the stability of the MFB, 13.3 per cent, reputation of the MFB, 7.9 per cent, attitude of the staff, 8.4 per cent and helpful staff, 7.8 per cent.
Unfortunately, the survey showed that less than one per cent of the adult that openedMFB account were able to access loan stating that 0.8 million adults got loans from a micro finance bank, 26.5 per cent of micro finance loan recipients have group loans, while 0.6 million adults, 70.0 per cent of micro finance loan recipients have individual loans with only a meagre 3.5 per cent of micro finance loan recipients having a combination of group and individual loans.
In terms of loyalty towards MFBs, the EFInA survey showed that 33.9 per cent of those who have MFB account have been with their MFB for more than 5 years, which includes the period when MFBs were called community banks, whilst 16.9 per cent of those who have a MFB account have been with their MFBs for more than 3 years but less than 5 years.
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