Last updated on October 29th, 2018 at 02:36 pm
Non-interest is most popular in the North West, while South East has the lowest, latest EFInA report says.
In the latest Did You Know Series: A research on Non-interest Finance in Nigeria, 0.4% of the Nigerian adult population which represents 0.4million people have a non-interest banking product. These people use savings account most. The products include Banking, Insurance, and Investments.
Of the 0.4million adults, 75.1% were male, the remaining 24.9% were female, while 35.6% of them had monthly incomes of between N13,000 and N70,000, EFInA report says.
Noninterest finance (banking, investment and insurance) is a form of finance which incorporates ethical principles and prohibits the acceptance or payment of interest.
Non-interest finance has its origin in Islamic principles of banking which sees interest has “haram,” something that negates Islamic ethics.
Users of non-interest banking product by Geo-political zone between 2012-2014
EFInA carried out the research using the six geopolitical zones in Nigeria-North West, North East, North Central, South West, South South, and South East-to determine the users of non-interest banking products.
The report shows that noninterest finance is most popular in the northern part of Nigeria compared to other regions in the country. And that’s because the northerners are predominantly Muslims.
North West has the highest number of noninterest finance users. In 2014, 39.1% of adults who used non-interest banking products were based in the North West. Though it’s a decrease compared to 2012 with 45.6% of adults. North West consists of Jigawa, Kaduna, Kano, katsina, and Kebbi, Sokoto, Zamfara states.
In the North East, noninterest finance rose from 4.7% in 2012 to 20.5% in 2014. Adamawa, Bauchi, Borno, Gombe, Taraba, and Yobe states make up the North East.
In the North Central, there is an increase from 10.6% in 2012 to 15.4% in 2014. North Central houses Benue, Kogi, Kwara, Nasarawa, Niger, Plateau states and the Federal Capital Territory.
Users of non-interest finance also increased in the South West, from 9.5% in 2012 to 13.2% in 2014. South West includes six states: Ogun, Lagos, Oyo, Osun, Ondo, and Ekiti.
While other geo-political zones witnessed increase, the South South and South East saw a decrease in the users of non-interest finance.
According to EFInA report, South South (Akwa Ibom, Cross River, Bayelsa, Riveers, Delta, and Edo states) had 19.8% in 2012, but it decreased to 10.6% in 2014.
South East (Abia, Anambra, Ebonyi, Enugu, and Imo states) had 9.8% in 2012, but witnessed a heavy decease in 2014 to 1.3%.
Download the full report of EFInA’s Overview of Non-Interest Finance in Nigeria
EFInA means Enhancing Financial Innovation & Access. It is a financial sector development organization that promotes financial inclusion in Nigeria. Established in late 2007, EFInA’s vision is to be the leader in facilitating the emergence of an all-inclusive and growth-promoting financial system.
EFInA is funded by the UK Government’s Department for International Development (DFID) and the Bill & Melinda Gates Foundation.