Executive Summary
One of the major challenges in the fight against poverty and hunger in Nigeria is the lack of reliable data, especially, as it pertains to the contributions of Nigerian banks in serving the needs of the poor with easy access to loans and driving financial inclusion.
This opinion research poll discusses about financial inclusion in Nigeria’s banking system, with much emphasis on how it is perceived today. It is geared to gain insight into the perception of the people on questions about where loans can easily be obtained in Nigeria between the banks and Esusu (traditional money lenders), and to provide reliable data needed by concerned stakeholders in driving financial inclusion.
Our findings in this research have shown that there are different perceptions on the question at hand, but there is general believe that the poor can easily obtain loans from Esusu when compared to the banks that are always in demand of immovable collateral. This reveals that the activities of traditional money lenders and local self-help social groups otherwise known as ‘Esusu’, that save money and give loans to the poor and underbanked, have played pivotal roles toward financial inclusion than most of the financial institutions operating in the formal sector.
In recognition of the impacts of financial inclusion towards sustainable development in Nigeria, CSR-in-Action Advocacy – a sustainability and governance focused non-profit for collective social consciousness in Nigeria – therefore, conducted a survey to gauge the perception of Nigerians towards easy access to loans in the country. Through this report, CSR-in-Action Advocacy provides insightful information about the opinions of the people.
Objectives
Our main objectives for conducting this survey were to:
- gauge the perception of Nigerians towards the easiest place to obtain loans between banks and Esusu.
- provide reliable data and honest feedback from the citizenry that would enable the concerned stakeholders to have a clear view of the real state of financial inclusion in the banking industry.
Background
Inclusive banking system that drive easy access to loans have been in operation in many nations to cater for the needs of the poor, improve their chances for resilient livelihoods and financial stability. This aligns with the World Bank’s definition of financial inclusion, which means “when individuals and businesses, irrespective of net worth and size, have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way”. It reflects the transformative power of financial inclusion to accelerate development gains, reduce poverty and boost prosperity.
While the term ‘financial inclusion or inclusive banking’ has gained momentum in the Nigerian banking industry, this has also intensified debates on whether Nigeria’s banks are really in the true path of financial inclusion and serving the needs of people at the bottom of the economic pyramids. This was the case in a recent street video interviews (Vox-Pop) conducted by CSR-in-Action Advocacy, where Nigerian citizens shared different opinions and experiences toward easy access to loans from banks compared to Esusu (traditional money lenders). The arguments from the street interviews necessitated the need for more structured opinion research poll that can gauge the real perception of the people and provide reliable data needed by concerned stakeholders in driving sustainable development.
Information about the perception of people towards the inclusive banking is vital and will enable the government, regulators, and other concerned stakeholders to have a clear view of the real state of financial inclusion in the banking industry and make informed decisions about how best to improve financial inclusion in Nigeria.
To find the clear facts about this argument, CSR-in-Action understands that it is pertinent to seek the opinion of the general populace and report the findings.
Methodology
Data collection method: Primary data was collected exclusively for the purpose of this survey, to ensure a high degree of accuracy and objectivity in comparing perceptions of Nigerians towards a single question.
Instrument for data collection: Online survey link was sent to about 17,000 people in our email newsletter database and through social media platforms, and the poll lasted for one month period before the link was closed.
A Report of Survey Findings
This survey is a single question survey undertaken to determine citizens’ opinion on where loans can easily be obtained between banks and Esusu. (traditional money lenders). Findings of this opinion poll reflect different perceptions of the respondents towards the issue.
From the findings of this survey, 35% (50 respondents) of the 144 respondents reported that loans can easily be obtained from Nigeria’s banks, while 65% (94 respondents) agreed that loans are easily accessed from Esusu.
The population of respondents who agreed that it is easier to obtain loans from Esusu compared to banks in Nigeria is 30% greater than those whose opinions suggest that loans are easily assessed from the banks. In this case, the 65% respondents in support of Esusu represents the opinions of the majority of Nigerians toward our survey question. This reveals that the activities of traditional money lenders and local self-help social groups, that save money and give loans to the poor and underbanked, have played pivotal roles toward financial inclusion than most of the financial institutions operating in the formal sector.
However, while the percentage of those in favour of the banks is low at 35%, this number is significant and should not be ignored. It suggests that loans can be obtained from the banks, but there could be stringent processes or rules that negate people from assessing such loans easily. This means that more is required of Nigeria’s banks to adopt better strategies to drive financial inclusion in Nigeria.
A Conclusion
This opinion research poll reveals that the activities of traditional money lenders and local self-help social groups otherwise known as ‘Esusu’, who save money and give loans to the poor and underbanked, have played pivotal roles toward financial inclusion than most of the financial institutions operating in the formal sector.
A consideration of the opinion of the people, as represented in this survey, reveals that efforts should be made to ensure that all households and businesses regardless of their income levels, have easy access to loans from the banks and can effectively use the appropriate financial services they need. There is also the need for the banks to increase customers’ financial literacy and capability so that they can understand different financial services and products that will actually exacerbate financial and economic instability, instead of opening bank accounts that end up lying dormant and have little impact on the economy.
Learning from the microcredit revolution shows that poor families in the informal economy are valuable clients, and that it is possible to serve them in large numbers sustainably. To advance financial inclusion, the banks need to engage in regular business innovations so that more people can access a broader range of products at lower costs.
If promoted, inclusive banking models that offer easy access to loans and other banking services designed for the poor, will play a major role in reducing extreme poverty; improving individual and household welfare; reducing barriers to economic participation by women and disadvantaged groups; and spurring small enterprise activities to achieve sustainable development in Nigeria.