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Nigerian Banks Close 234 Branch Offices, 649 ATMs in 2020 - Report

Nigerian Banks Close 234 Branch Offices, 649 ATMs in 2020 – Report

A new report by the International Monetary Fund (IMF) has disclosed that Nigerian banks closed 234 branches and 649 Automated Teller Machines (ATMs) in 2020 leading to a decline in the country’s Financial Access Score (FAS) to 4.44 last year against 4.78 in 2019.

The global financial body disclosed this in its Financial Access Survey (FAS) 2021 Trends and Developments. IMF is known to utilise two FAS indicators to monitor Target 8.10 of the 2030 Sustainable Development Goals (SDGs), which aims to increase domestic financial institutions’ capacity to promote access to banking and financial services.

The number of commercial bank branches per 100,000 adults and the number of ATMs per 100,000 adults are the two commonly used FAS indicators.

According to details from the report, Nigeria experienced reductions in these two crucial FAS indicators as well as 12 other FAS indicators out of a total of 64 used.

The financial body stated that these reductions were due to a drop in the number of commercial bank branches in Nigeria from 5,392 in 2019 to 5,158 in 2020.

Similarly, the fall in the number of bank branches led to a drop in the number of ATMs in Nigeria by 649, leading to an average of 18,810 ATMs in 2020 from 19,459 in 2019. This also led to the country’s financial access score falling to 17.19 in 2020 from 16.14 in 2019 in terms of the number of ATMs per 100,000 adults.

Amid other economic shocks, the devastating effects of the pandemic led to banks in Nigeria temporarily or permanently shutting down their branches as the virus forced people to remain indoors and adopt remote models.

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The rapid reductions in bank branches and ATM points alike are also due to the rising use of digital and mobile banking solutions.

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Instant payment yearly statistics for 2020 released by the Nigerian Inter-Bank Settlement System (NIBSS) shows that mobile transactions in Nigeria (mobile & USSD) surged in 2020.

These payments witnessed an 82.6 per cent growth at a transaction value of 1.69 billion compared to the 928.86 million they recorded in the previous year.

Point of Sale (POS) usage statistics from NIBSS also put the volume of POS transactions for 2020 at 77 million, a nearly 40 per cent increase from the 46 million transactions recorded for 2019.

Basically, Nigerians are rapidly moving towards more contactless and digital modes of transaction and this is taking its toll on traditional banks. One of its effects is the declining number of bank branches and ATMs across the country.


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