Use of Financial Services in Nigeria Account ownership is strongly related to poverty: the wealthiest 20 percent of households are at In 2010/2011, the National Bureau of Statistics in least 8 times more likely to have an account than collaboration with the World Bank conducted the the poorest households. General Household Survey Panel (GHS-Panel), which collects detailed data on income. The GHS- Panel is a nationally representative survey with a Households with a Formal Account, sample of 5,000 households and 14,800 adults; by Consumption Quintile the second wave runs from 2012/2013. Among a 70% range of socioeconomic measures collected from households, the survey gathers information on 60% banking, savings, and insurance. 50% Households (%) Who Banks? 40% About one in five adults and 38 percent of 30% households report having a formal bank account. This includes both commercial banks (34% of 20% households) and other financial institutions such 10% as microfinance institutions (MFI), cooperative societies, and savings associations. The incidence 0% of banking is higher in the South West region with Q1 Q2 Q3 Q4 Q5 56 percent of households and lowest in the North West region with 16 percent of households with a Along with poverty, banking has a strong formal bank account. urban/rural dimension. Urban households are 2.5 times more likely to have an account, compared Percentage of Households with a to rural households. Formal Bank Account, by Region Among those households with an account, about 60.0 one third of them use more than one bank. Data 50.0 on the individual level shows that women are 40.0 almost half as likely as men to be banked. About 30.0 14 percent of women have a formal account, 20.0 compared to 26 percent of men. An equal 10.0 percentage of men and women report using 0.0 someone else’s account (6%). Among female- headed households, about one quarter have an account, compared to 40 percent of male-headed households. Prime-age adults are the most likely to have an Insurance is a rarity: only 3 percent of households account. Less than 10 percent of youth (ages 15- report having any sort of insurance, such as 24) are banked, compared to more than a quarter health, life, or property. of adults 25-64. Forty percent of young adults report using someone else’s account. Remittances Overall, money from family and friends is about 9 percent of the value of total household Adults with a Formal Account consumption. About 25 percent of households receive such transfers, and for these households Urban the remittances are a much more significant share Rural of their consumption, being about 36 percent of total household consumption. This is a measure of Tertiary remittances received and does not factor into Secondary Primary remittances sent and net remittances, as None households that receive may also be sending remittances. 65+ 25-64 15-24 Domestic remittances dominate. While 20 percent of households receive domestic remittances, only Male Female 2 percent of households receive remittances from 0% 10% 20% 30% 40% 50% 60% 70% family or friends living abroad. While they are Individuals (%) more common, domestic remittances are on average smaller than international remittances (₦115‘000 and ₦171‘000, respectively). Accounts in formal institutions are not the only ways to save in Nigeria. Seventeen percent of Interestingly, just under half of female-headed adults report savings in an informal savings group households (45%) report receiving domestic or (adashi/esusu/ajo). Women without bank international remittances, compared to 19 percent accounts use community savings groups as an of male-headed households. Among receivers of alternative way to store their money. They are remittances, the amounts received constitute a also more likely to use these methods than men: larger percentage of total household 20 percent of women relative to 14 percent of consumption for female-headed households men. (57%), relative to male-headed households (27%). Where to Find Insurance/Credit? This brief is based on data collected by the Nigeria National Bureau of Statistics as part of the Formal institutions are not the dominant source of Living Standards Measurement Study – Integrated credit. Only 4 percent of households (and 2 Surveys on Agriculture (LSMS-ISA) project. The full percent of adults) use formal credit (i.e., from a dataset is available at NADA via bank, MFI, cooperative society or savings www.nigerianstat.gov.ng for download. association). Almost 10 percent of adults report having been rejected for a formal loan. In comparison, 24 percent of households (and 13 For more information, please visit: percent of adults) report borrowing from www.nigerianstat.gov.ng family/friends and 15 percent of households (and Or contact: 7 percent of adults) report borrowing from a National Bureau of Statistics community savings group. feedback@nigerianstat.gov.ng Borrowing patterns of men and women are similar. However, female-headed households are less than half as likely to have borrowed from family and friends.