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By Chinwendu Obienyi
Despite the increasing number of Nigerians registering for Bank Verification Numbers (BVN) which stood at 61.47 million as at April 2, 2024, concerns remain high regarding the large segment of the population (40%) that remains financially excluded.
According to EFInA Access to Finance (A2F) 2023 survey, Nigeria in the last two years has reported changes in the population dynamics evidenced by increased urbanization of the population and despite a gradual young and digitally savvy population and marked boost in entrepreneurial activities, the disparity between BVN registrations and actual bank account ownership highlights ongoing challenges in achieving full financial inclusion.
Data from the Nigeria Inter-Bank Settlement System (NIBSS) as at March 2024, revealed that no fewer than 2.47 million Nigerians registered for BVN which stood at 61.16 million as against the count (59 million) recorded in December 2023.
This figure came as a result of the directive given by the Central Bank of Nigeria (CBN) for customers to link their BVN or National Identity Number (NIN) to their bank accounts and wallets.
The apex bank had asked banks to restrict transactions on accounts whose NIN and BVN have not been linked, starting on March 1, 2024. Although the bank has been silent after the deadline elapsed, the 61.47 million represents a positive step towards a more secure and transparent financial system.
However, economic analysts who spoke to Daily Sun on Monday, stated that without addressing the underlying issues that keep a large portion of the population unbanked, the benefits of such initiatives may not be fully realized.
Whilst listing accessibility, economic barriers, cultural and regulatory challenges as factors inhibiting the process, they noted that a concerted effort from both the public and private sectors is essential to ensure that all Nigerians have access to the financial services they need to improve their economic well-being.
Managing Director, APT Securities, Kurfi Garba, explained that many Nigerians are still unaware of the benefits of having a bank account or the process involved in obtaining one.
He said, “Financial literacy is low, and there are misconceptions about the banking system that deter people from participating. Also, some communities have a deep-rooted mistrust of formal banking institutions based on their experiences in which some lost money and never got it back. This cultural preference for handling money in tangible forms contributes to the high unbanked population”.
Kurfi added that although there are efforts from the regulatory authorities to improve the situation, there could be the promotion of mobile wallets and payment service banks, which require less stringent identification compared to traditional bank accounts.
For her part, Chief Economist at Coronation Merchant Bank, Chinwe Egwim, enhancing the overall economic environment, reducing unemployment and technology are seen as crucial steps toward increasing financial inclusion.
Egwim said, “Banks and regulatory bodies need to invest in advanced cybersecurity technologies and practices to protect BVN data from breaches and unauthorized access. There should be ongoing efforts to educate the public about the importance of BVN registration, its benefits, and how to safeguard their information”.
By addressing these concerns proactively, Nigeria can leverage the benefits of the BVN system while mitigating associated risks and ensuring a secure and inclusive banking environment”.
