Mobile Banking Adoption in Nigeria

Victor Ifegwu Mbonu

6 months ago

In recent years, mobile banking in Nigeria has seen rapid growth, reshaping the country’s financial landscape. With the rise in smartphone usage and internet penetration, more Nigerians are turning to mobile banking for their financial needs thereby significantly increasing financial inclusion in the country. As of 2021, at 82%, Nigeria was reported to have the highest number of mobile money users in the world, second only to Turkey which had 85% of its population as mobile money users.

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According to the Enhancing Financial Innovation & Access (EFInA), approximately 39% of Nigerian adults now use mobile banking services. This surge is further corroborated by the Nigeria Inter-Bank Settlement System (NIBSS), which reported a 128.4% increase in mobile transactions in the first four months of 2022 compared to the same period in 2021. The Central Bank of Nigeria (CBN) also notes that mobile banking has grown by 40% over the past five years, emphasizing its growing significance in the financial sector. Interestingly, mobile banking is predominantly used by younger Nigerians, with the highest adoption rates observed among individuals aged 18-35. Specifically, 35% of users fall within the 18-25 age bracket, and 45% are between 26-35 years old. This trend highlights the tech-savvy nature of Nigeria’s younger population and their preference for digital solutions. Additionally, while urban areas see a higher adoption rate at 60%, rural regions are also catching up, with 40% of rural adults using mobile banking services.

Statistics on Usage

Percentage of Population Using Mobile Banking:

39% of Nigerian adults use mobile banking services.

Growth Rate:

Usage has grown by 40% over the past 5 years.

Demographics of Users

Age Groups:

18-25 years: 35%
26-35 years: 45%
36-45 years: 15%
46+ years: 5%

Source: Central Bank of Nigeria (CBN)

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Urban vs Rural:

Urban: 60%
Rural: 40%

Source: Nigerian Interbank Settlement System (NIBSS)

Transaction Volume and Value

Monthly Transactions:

Over 300 million transactions per month.

Source: CBN

Transaction Value:

Total value of mobile banking transactions in 2023: ₦1.8 trillion.

Source: CBN

E-Payment Statistics in Nigeria

Challenges

Despite its advantages, there are several challenges:

Network Reliability: Frequent network issues can disrupt transactions.
Cybersecurity Threats: The increasing risk of fraud and cyber-attacks poses significant concerns.
User Education: There is a need for more awareness and education on using mobile banking safely.

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Future Projections

The future of mobile banking in Nigeria looks promising, with continued growth expected. Users are projected to increase by 50% by 2025, driven by innovations such as blockchain-based transactions and AI-driven financial services. The CBN’s policies aim to further enhance financial inclusion, targeting a 95% inclusion rate by the end of 2024. The Apex Bank has what it refers to as the Payments System Vision 2025 (PSV 2025), which it announced publicly on November 24, 2022. The Vision provides a five-year strategic roadmap for the Nigeria payments system to strengthen the adoption of electronic payment, enhance the safety, reliability and resilience of the system, account for new products and participants, foster financial inclusion and catalyse Nigeria’s economic growth and development.

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