2020 Financial Assess Score (FAS): Banks closed 234 branches, 649 ATMs
Posted: November 4th, 2021, 2:59 am
According to Vanguard news, Nigerian banks closed 234 branches, 649 ATMs in 2020 indicating a drop in two out of many other indicators measuring Financial Assess Score (FAS) from 2019 to 2020, based on the International Monetary Fund report.
However, as you would read below, Bankka.ng opines that decline in these two indicators are not necessarily bad omen as regards the FAS criteria. For instance, these FAS indicators make use of number of bank branches per 1000 population and number of ATM machines per 1000 population as bases for the changes. These 2 criteria do not single-handedly dictate financial access of the populace. For instance:
1. FINTECH has made physical banking and use of physical cash less useful. Many services previously predominantly rendered inside banks and on ATM machines can now be handled online via mobile apps, internet banking and even USSD. These services include but not limited to funds transfer, loan application and disbursement, FX transactions, and many more.
2. CRYPTOCURRENCIES have also replaced traditional legal tender in performing many trades and exchanges, and also store of value. The impact of the cryptocurrencies is huge and is still evolving.
3. MOBILE MONEY AGENT BANKERS act as POS agents and money agents, performing nit just roles of ATM, but also of bank branches.
With just these three and based on the understanding of Financial Assess, closing physical bank branches and ATM machines could simply be adaptation moves by the financial institutions in response to COVID-19, and also a drive towards efficiency as fintechs take hold. Banking is becoming less of physical branches and cash dispensing ATMs.
Little wonder new banks like Globus Bank use the slogan PHY-GITAL. This highlights the drive to my physically present considerably, but also available digitally to fill the need of the evolving cashless and digital economy.
However, below is the Vanguard news report for your reading:
However, as you would read below, Bankka.ng opines that decline in these two indicators are not necessarily bad omen as regards the FAS criteria. For instance, these FAS indicators make use of number of bank branches per 1000 population and number of ATM machines per 1000 population as bases for the changes. These 2 criteria do not single-handedly dictate financial access of the populace. For instance:
1. FINTECH has made physical banking and use of physical cash less useful. Many services previously predominantly rendered inside banks and on ATM machines can now be handled online via mobile apps, internet banking and even USSD. These services include but not limited to funds transfer, loan application and disbursement, FX transactions, and many more.
2. CRYPTOCURRENCIES have also replaced traditional legal tender in performing many trades and exchanges, and also store of value. The impact of the cryptocurrencies is huge and is still evolving.
3. MOBILE MONEY AGENT BANKERS act as POS agents and money agents, performing nit just roles of ATM, but also of bank branches.
With just these three and based on the understanding of Financial Assess, closing physical bank branches and ATM machines could simply be adaptation moves by the financial institutions in response to COVID-19, and also a drive towards efficiency as fintechs take hold. Banking is becoming less of physical branches and cash dispensing ATMs.
Little wonder new banks like Globus Bank use the slogan PHY-GITAL. This highlights the drive to my physically present considerably, but also available digitally to fill the need of the evolving cashless and digital economy.
However, below is the Vanguard news report for your reading:
https://www.vanguardngr.com/2021/11/nig ... mf-report/Nigerian banks closed 234 branches, 649 ATMs — IMF
November 2, 2021
*Records decline in SDG financial access score
By Babajide Komolafe
The International Monetary Fund, IMF, yesterday, said 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 in the year against 4.78 in 2019.
The IMF disclosed this in its Financial Access Survey 2021 Trends and Developments released yesterday.
According to the report, the international community uses two FAS indicators to monitor the Target 8.10 of the 2030 Sustainable Development Goals (SDGs) which aims at strengthening the capacity of domestic financial institutions to expand access to banking and financial services.
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The two FAS indicators are Number of Commercial Bank Branches per 100,000 Adults and Number of ATMs per 100,000 Adults.
According to the report, Nigeria recorded declines in these two critical FAS indicators and 12 other indicators among the 64 indicators measured by the FAS.
This according to the report, was due to the decline in the number of commercial bank branches in Nigeria to 5,158 in 2020 from 5,392 in 2019.
Consequently, the Number of Commercial Bank Branches per 1,000 km2 in Nigeria fell to 5.94 in 2020 from 5.68 in 2019.
Similarly, in terms of Number of ATMs per 100,000 Adults, the country’s Financial Access score fell to 17.19 in 2020 from 16.14 in 2020.
The reduction according to the IMF was to fall in the number of ATMs in Nigeria by 649 to 18,810 in 2020 from 19,459 in 2019.
Also, the Number of ATMs per 1,000 km2 in Nigeria fell to 20.65 in 2020 from 21.36 in 2019.
The IMF report also showed a sharp decline in the number of registered mobile money agent outlets in Nigeria to 129,154 in 2020 from 145,800 in 2019, representing 11 per cent decline.