A new report by Enhancing Financial Innovation & Access (EFInA) has revealed significant disparities in banking penetration and financial inclusion across Nigerian states.
The report, titled States’ Fact Sheets, provides a first-of-its-kind, state-by-state analysis of financial ecosystems, offering actionable insights for policymakers, financial institutions, and development stakeholders.
According to the report seen by NewsNGR, Kogi State leads the nation in banking penetration with 94 per cent, followed closely by Lagos State at 91 per cent, and Ekiti State at 77 per cent.
These states exemplify robust financial ecosystems supported by high literacy rates, mobile phone penetration, and targeted financial programs.
Kogi’s financial inclusion success between 2020 and 2023 was driven by initiatives like the Anchor Borrowers’ Program, World Bank partnerships, and COVID-19 intervention loans.
Commodity-based cooperatives, particularly among rice farmers, also played a role in enhancing access, despite challenges with bank collateral requirements.
However, in stark contrast, the report noted that northern states like Borno (13 per cent banked), Yobe (22 per cent), and Sokoto (22 per cent) face significant barriers to financial inclusion.
These challenges reflect limited access to formal banking systems and infrastructure, exacerbating financial exclusion rates that reach as high as 68 per cent in Borno, 60 per cent in Sokoto, and 57 per cent in Zamfara.
Conflict-affected regions are particularly hard-hit. For instance, 68 per cent of adults in Borno and 45 per cent in Taraba are excluded from financial services, underscoring the need for innovative solutions tailored to these areas.
On the role of informal and alternative financial systems, the report highlighted that informal financial systems remain a lifeline in several states where formal banking is less accessible.
Ebonyi and Benue, for example, report reliance on informal financial services at rates of 37 per cent and 24 per cent, respectively.
Meanwhile, states like Kebbi and Kwara show higher adoption of non-bank financial services such as mobile money, each with 22 per cent reliance on these “other formal” channels.
These trends present opportunities to expand financial inclusion through alternative models, particularly in states where traditional banking infrastructure is lacking.
The report highlights sharp regional contrasts. Southern states, including Delta (77 per cent), Edo (71 per cent), and Ekiti (77 per cent), exhibit strong formal financial participation.
Meanwhile, northern states like Kano (32 per cent), Katsina (30 per cent), and Kebbi (24 per cent) lag significantly behind. Addressing these regional disparities will require customized strategies that consider the unique socio-economic and infrastructural challenges of each state.