Country Financial Sector Profilesback

Financial Sector Overview

Economic Landscape

Nigeria, with a gross domestic product (GDP) of NGN 129,100 billion (USD 356.4 billion) in 2018, is the largest economy in sub-Saharan Africa (SSA). The country accounts for 70% of exports of the Economic Community of West African States (ECOWAS). With a crude oil production of nearly 2 million barrels a day, Nigeria is the largest oil producer in Africa and one of the largest oil exporters in the world. Oil and gas account for 90% of exports and 75% of budget revenue. Between 2010 and 2017, the average annual growth rate was 4%, slightly higher than that for SSA at 3.87%. Following the collapse of oil prices, the country entered into recession in 2016, but returned to growth in 2017 thanks to a recovery plan designed around improving macroeconomic stability, growth and diversification of the economy. As a result, the economy has undergone a transformation in its services and industry sectors, which has fostered the emergence of a middle class representing about 20% of the population. Despite this, poverty remains high with over 63% of the population living on less than USD 1.4 In addition to this, there are security issues in the country's north-eastern states caused by the Boko Haram insurgency. Other indicators such as the ‘World Bank's Doing Business Rating’ show a deterioration in the business environment has deteriorated, ranking 127th out of 190 countries in 2019; down 9 spots. However, the country's economic competitiveness has improved. Nigeria moved from 127th rank in 2010 to 115th position (out of 140 countries), gaining 12 spots, according to the World Economic Forum's 2018 ranking.

Financial Sector Overview

In 2018, the Nigerian financial sector consisted of 27 licensed banks including 21 commercial banks, 5 investment banks and 1 bank without banking interest. Other financial institutions include 7 development finance institutions, 35 primary mortgage banks, 885 microfinance banks, 69 finance companies and 4,492 foreign exchange bureaus. These institutions are regulated under the authority of the Central Bank of Nigeria (CBN). The CBN has continued to strengthen the domestic financial market by aligning it with international financial market standards. The International Financial Reporting Standard, IFRS 9, came into effect in January 2018, in accordance with the guidelines of the International Accounting Standards Board. Risk-based surveillance guidelines extended to cybersecurity were introduced in January 2019 for banks and payment service providers. These guidelines also cover governance, risk management system and operational resilience. Corporate governance codes for development financial institutions (DFIs) and finance companies came into effect on 1 December 2018.

Banking Sector

Banking Market Structure - In 2018, commercial bank assets amounted to NGN 37,207 billion (USD 102.7 billion), or 29.1% of GDP. Bank assets (as a share of GDP) fluctuated between 2012 and 2018, with a prolonged decline since 2016. This decrease is partly due to the reduction of credit to the private sector and the outstanding amount of national treasury bills. In 2016, the top 5 banks accounted for 62.7% of total banking sector assets, while interest margins accounted for most of their profits in 2018.

Banking Sector credit and Deposits Structure - Credit to the private sector amounted to NGN 15,134.2 billion (USD 41.8 billion) at end 2018, that translated to 16.5% of GDP. It declined in 2017 and 2018 due to their preference for less risky fixed-income securities, particularly short-term government-issued securities with high returns. Consumer credit amounted to NGN 650.7 billion (USD 1.8 billion) in 2018, after a significant decline of 15.1% in 2017 compared to 2016. The increase in non-performing loans, particularly in the oil and gas sectors, which accounted for around 30% of bank lending in 2018, increased banks’ vulnerability and their reluctance to finance these key sectors of the economy. Deposits received by commercial banks reached NGN 21.430 billion (USD 59.2 billion) in 2018, an increase of 11.9% over 2017, partly due to the credit rate increase. They were dominated by savings deposits and term deposits, which accounted for 43.3% of total deposits in 2018.

The CBN recently issued a circular urging banks to gradually meet a minimum loan-to-deposit ratio of 60% in order to boost credit to the economy. The transformation ratio of Nigerian banks, which stands at below 60%, is one of Africa’s lowest (78% on average, according to Bloomberg).

Deposit and Lending Rates - The monetary policy implemented gives priority to price stability, with a target range of 6 - 9% set by the central bank. Headline inflation reached 12.1% in 2018 against 16.5% in 2017, as a result of a tightening of monetary policy. The policy rate was revised upwards from 11% in 2015 to 14% in 2016. The level of inflation, which is above the target range, has also prompted the choice of a non-expansionist policy by the central bank that has maintained the policy rate at 14%, with an asymmetric corridor of +200/-500 basis points. This policy contributed in part to an increase in the average lending interest rate from 16.9% in 2016 to 17.6% in 2017. Monetary policy tightening has also led to a significant slowdown in available liquidity in the banking market. The average deposit interest rate was 9.6% in 2017, i.e. an increase of 2 percentage points from 2016, which reflected efforts made to stimulate the mobilisation of domestic savings.

Financial Soundness of the Banking Sector - The banking sector remains sufficiently capitalised since 2013. The capital adequacy ratio has remained above the regulatory minimum of 8%. However, this ratio decreased from 17.5% in 2015 to 14.8% and 10.2% in 2016 and 2017 respectively, partly due to the decrease in eligible capital following the depreciation of loans. Between 2013 and 2017, the sector remained liquid, given that the liquidity ratio is above the regulatory threshold of 30%. It stood at 51.7% in 2018. Banks posted positive profitability between 2013 and 2017. After declining between 2014 and 2016 as a result of the decline in economic activity, return on equity (ROE) steadily improved to reach its highest level in 2017 (23.5%). Return on assets (ROA) remained relatively stable at around 2%. Although the intermediation ratio is compliant with the prescribed maximum (80%), it has been declining since 2016 due to reduced credit growth that failed to keep pace with rising deposits. Since 2015, asset quality has deteriorated due to the difficult macroeconomic environment caused by oil price shocks. The increase in non-performing loans is partly due to banks' exposure to the oil and gas sector, which accounts for about one-third of the loan portfolio. However, it fell by three percentage points to 11.7% at end 2018, driven by higher oil prices and the sale of non-performing loans to asset management companies, including AMCON (Asset Management Corporation of Nigeria).

Financial Inclusion

In 2012, the central bank adopted a National Financial Inclusion Strategy, which was revised in 2018 with the specific purpose of reducing the proportion of financially excluded adults to 20% by 2020 against 46.3% in 2010.  Financial inclusion in Nigeria did not record any real progress between 2014 and 2017. The proportion of adults with an account (any type of account) decreased by 10.6% from 44.4% in 2014 to 39.7% in 2017, well below the sub-Saharan average (42.6%). Several factors account for this. The rate of adoption of banking services by bank intermediaries and their density remains low, due in part to lack of financial education. Moreover, a large number of Nigerians do not have national identity cards. Of the 96.4 million Nigerian adults in 2017, only 27.6 million, or 28.6% of adults, had received a national identity number. This situation undermines the ability of financial service providers to meet the Know Your Customer requirements. In addition, financial products remain poorly adapted due to several cultural and religious factors.

The Microfinance Sector - The sector had 885 microfinance banks (MFBs) in 2018. Despite the large number of MFBs, 8 of them with national coverage account for 38% of deposits and hold 44% of the Nigerian market. The sector’s total assets amounted to NGN 421.95 billion (USD 1.2 billion) at end December 2018 (provisional), against NGN 352.36 billion (USD 972.7 million) at end December 2017. Loans and advances increased by 14.4% compared to 2017 to reach NGN 220.95 billion (USD 609.9 million) at end December 2018. Deposits increased by 31.3% to NGN 213.25 billion (USD 588.7 million). Reserves also increased by 45.1% to NGN 28.81 billion (USD 79.5 million) at end December 2018.

Overall, the microfinance sector remains well capitalised, profitable and liquid. The capital adequacy ratio was 41.75% in 2018 compared to 34.64% in 2017. Average return on assets (ROA) declined from 3.9% in 2017 to 1.2% in 2018, while return on equity (ROE) increased from 7.6% in 2017 to 16.46% in 2018. The liquidity ratio stood at 82.8% (91.7 in 2017), above the recommended minimum of 20%. However, the quality of risky assets continues to deteriorate. The portfolio risk rate rose from 21.2% at end December 2017 to 23.1% at end December 2018. The sector continues to face several challenges. Microfinance banks are not yet connected to the national switch, which raises processing time and cost of operations. Data management systems remain inefficient and microfinance banks face liquidity problems. The poor quality of service to customers and the resulting lack of confidence are partly related to poor regulation of the sector. Regulatory constraints also limit the possibility of broader social and national impact for MFBs. They remain less competitive because of the high interest rates they practice. This situation, coupled with limited transparency and a relatively small size of MFBs, representing barely 1% of total assets of deposit banks, constitute major obstacles to the extension of financial services to the population. Lastly, microfinance banks lack sufficient funds and expertise to build an adequate digital financial services infrastructure.

Digital Finance - A Vision 2020 Payment Systems Strategy was launched by the central bank in March 2007 and reviewed in 2013. The payments ecosystem is diversified, with the mobile money sector having the largest number of actors. In 2018, electronic payments amounted to NGN 2,046.4 million and 133,042 billion (368.5 billion USD) respectively in volume and value, up 38% and 34% respectively from 2017. Payments at ATMs dominated the volume of electronic transactions at 42.8%. In value, automatic payments of interbank settlements accounted for 60.4% of payments related to electronic transactions. The contribution of mobile money payments is still low, in terms of both volume and value, with respective shares of 2.9 and 0.9%. Digital financial services have not yet achieved their full potential in Nigeria because of several existing barriers. The financial services offered by mobile network operators were recently authorized by the central bank and are not very diversified. Moreover, the networks of agents are insufficient for the expansion of financial services, especially in rural areas. The low level of commissions received by these agents are demotivating factors. In addition, mobile network operators are not allowed to use agent networks for digital financial services (except through the super-agent license). In 2017, the sector recorded only 11,000 mobile money agents (140,000 in Ghana and 165,000 in Kenya). This low geographical coverage partly explains the difficulties of financial inclusion/access to financial services. Besides, many government payments to individuals and vice versa are not yet digitized.

SME Financing - Nigeria is an entrepreneurial economy with about 37 million micro, small and medium enterprises (MSMEs). Their contribution to economic growth is significant employing about 60 million people. MSME access to credit remains low. According to the World Bank, only 6.9% of Nigerian companies use bank loans to finance investments, a level well below the sub-Saharan average (19.3%). Only 11.4% of Nigerian businesses have a bank loan or credit line, compared to 20.7% for SSA. The majority MSMEs use alternative means to finance their activities. About 71% of micro-entrepreneurs rely on personal savings, while 14% of sources of financing are from friends and family. Loans from deposit banks and microfinance institutions reportedly affect 11% and 10% respectively of micro-entrepreneurs. The low level of financial literacy affects the ability of entrepreneurs to submit bankable projects and access financing on favourable terms. Insufficient guarantees and lack of adequate information about the applicant remain major issues when applying for loans. In addition, MSMEs often face restricted access to markets and limited technical capacities that significantly impact their viability.


The National Insurance Commission, as the key insurance sector regulator, is mandated to administer, supervise, regulate and control insurance activities in the country. In May 2016, the Commission increased the minimum capital requirement for all categories of insurance except for microinsurance companies Existing companies have until 30 June 2020 to fully comply.

Gross premiums in the insurance sector amounted to NGN 371.8 billion (USD 1 billion) in 2017, i.e. an increase of 14% relative to 2016. The sector is dominated by the non-life sector, with a 56.7% share in total gross premiums. The life insurance sector is gradually gaining importance. It rose from 31.4% in 2015 to 43.3% in 2017. The sector accounts for a density of USD 6.2 per capita. In 2018, insurance assets in Nigeria amounted to NGN 1.3 trillion (USD 3.6 billion). Although the insurance sector has real potential for growth, many challenges lie ahead. Several licensed insurance companies are still undercapitalized, thus limiting their ability to cope with high risks, particularly in the oil, gas and aviation sectors. Moreover, the sector continues to face a significant need for modern digital and technological infrastructure necessary to boost insurance penetration, which remains at a low 0.3% in 2018.

The Capital Market

The Nigerian capital market is regulated by the Securities and Exchange Commission and its activities are aimed at ensuring the efficient functioning of the Nigerian capital market. The roadmap of the Commission’s activities is set out in the Nigerian Capital Market Master Plan (2015-2025). This market is organized around several organizations, the main ones being: the Nigerian Stock Exchange, the Association of Securities Exchanges of Nigeria, the National Association of Security Dealers and the Commodity Exchange.

In 2018, 164 companies were listed on the 3 compartments of the Nigerian Stock Exchange (167 in 2017) for a total capitalisation equivalent to 17.1% of the GDP, against 20.1% in 2017. The equity compartment had 170 shares (172 in 2017) with a capitalisation of NGN 11,730 billion (USD 32.4 billion), i.e. an increase of 13.9% compared to 2017. The number of listed bonds rose sharply from 80 to 108. Nine funds traded on the stock exchange in 2018.  Six banks were among the twenty (20) most capitalised shares of the stock market. Banks accounted for 22.3% of market capitalisation in 2018 (25.7% in 2017). The electronic initial public offering (e-IPO) was launched in 2018 to facilitate the automated issue of shares. Several initiatives have been implemented as part of capital market development. The 10-year (USD 29.5 million) Federal Government bonds (over 5 years) issued in 2017 have been listed on the stock exchange. This initiative was intended to provide investment opportunities to the public while expanding options for the country’s financing needs. An electronic payment platform (X-pay application) has been introduced to allow market participants to make payments for products and services offered by the Exchange. IPOs raised USD 851 million in capital between 2010 and 2017.

Despite significant progress made in recent years, many challenges remain to be addressed. Nigeria's capital market depth as measured by the stock market capitalization is still relatively low (17% of GDP) compared to 328% of GDP for South Africa. The base of domestic investors also remains small disproportionately representing key sectors of the economy such as oil, gas, telecommunications.

Social Security

In 2017, the country had 51 operators in the sector, including 21 pension fund administrators, 4 pension fund trustees, 7 closed pension fund administrators (CPFA) and 19 approved existing schemes (AES). The total number of pension scheme subscribers was 7,888,559 as at 31 December 2017, or an increase of 6.4% from 2017. Membership is dominated by affiliation to retirement savings accounts (RSAs), which registered 7,823,911 members, or a share of 99.18%. Existing approved schemes and closed pension fund administrators together accounted for 0.82% of total memberships. Total pension contributions to retirement savings accounts by private and public sector employees amounted to NGN 610.84 billion (USD 1.7 billion). The public sector accounted for 42.09% of total contributions in 2017. The total value of pension fund assets reached NGN 7,510 billion (USD 20.8 billion) at end 2017. Federal Government securities (Federal Government bonds, treasury bills and Federal Agency bonds), account for about 70% of total assets in the sector. PFAs/CPFAs may invest in different asset categories (including foreign investments), but within the limits of the Commission's guidelines. At least 60% of pension funds must be invested in companies or projects in Nigeria. With regard to retirement savings accounts, the total investment of the pension fund administrator (international share certificates, deposit certificates denominated in Naira or Eurobonds) must not exceed 10% of the portfolio value.

Contact Details Information of Banks operating in Nigeria - 2018







 1665, Oyin Jolayemi Street, Victoria Island
victoria island, LAG, NGN.

(+234) 01 26210404


 14th Floor, 51/55 Broad Street
P.O. Box: 12021

(+234) 12 641 566


 Southgate House, Osborne Estate, Osborne Rd, Lagos

 (+234)  1 700 0270


 11 Idowu Taylor Street
Victoria Island, LAG

 (+234) 01 2622000


 Coscharis Plaza, Plot 1070
Faskari Street, Area 3, Garki



 4, Adeyemi Lawson Road Ikoyi


 (+234) 1 269 3327


 PGD's Place, Plot 4, Block V, B.I.S Way, Oniru Estate
Victoria Island, LAG, NGN.

 (+234) 01-448983


 2, Ajose Adeogun Street
Victoria Island, LAG

 (+234) 01 2626638


 Plot 143, Ahmadu Bello Way, Victoria Island, Lagos

 (+234) 01-2623780


 Plot 1092, Adeola Odeku Street, Victoria Island

 (+234) 12 623 576


 10, Keffi Street, Off South West, Awolowo Road, Ikoyi 101233, Lagos,

 (+234) 810 082 0082


 2 Kofo Abayomi Street
Victoria Island, LAG

 (+234) 01 2610408


 Samuel Asabia House, 35 Marina Lagos
Lagos, LAG

 (+234) 01 9052673


 Head Office: Primrose Towers, 17A Tinubu Street
P.O. Box: 9117

 (+234) 12 793 030


 Primrose Towers, 6-10 Floors 17A Tinubu Square
 , LAG

 (+234) 01 2665944


 5th-8th Floors

1/5 Odunlami Street


 (+234) 1 270 2880


 Primrose Towers, 6-10 Floors 17A Tinubu Square

 (+234) 01 2665944


 Plot 292, Ajose Adeogun Street, Victoria Island, Lagos
 , LAG, NGN.

 (+234) 012369000


 Lagos Regus Service Centre 7th Floor, Mulliner Towers 39 Alfred Rewane 

(+234) 1 448 9200


 73 Ralph Shodeinde Street Central Business District. P.M.B. 31 Garki Abuja

 (+234) 708 063 5500


  5th Floor, 25 Boyle St, Onikan, Lagos

 (+234) 1 2633638


 Plot 707, Adeola Hopewell Street,
Victoria Island, Lagos

 (+234) 014485742


 94, Broad Street,

 (+234) 02645132



 23 Kofo Abayomi St, Victoria Island, Lagos

 (+234) 1 280 4000


 Adetokunbo Ademola Street

Victoria Island


 (+234) 70077684387


 12th Floor Churchgate Towers 2

Plot PC 31

Churchgate Street

Victoria Island


 (+234) 1 463 7900


 Plot 708/709, Adeola Hopewell Street, Victoria Isl
 , LAG,

 (+234) 01-2627760


 Walter Carrington Crescent, Vicoria Island Lagos
Victoria Island

 (+234) 01 2620380


 Wuse II, Abuja

 (+234) 94612665


 Sterling Towers, 20 Marina, Lagos.
20 Marina, Lagos, LAG

 (+234) 01-2702300


 62/66 Broad street


 (+234) 1 2600470




 1 Oladele Olashore Street
Victoria Island, LAG

 (+234)  6232117


 36, Marina
Lagos, LAG, NGN.

 (+234) 01 2665441


 Head Office: Stallion Plaza, 36 Marina
P.O. Box: 2027

 (+234) 12 716 816


 57, Marina
Lagos, LAG, NGN.

 (+234) 01 2644651


 Plot 785, Herbert Macauly Way,
Central Business District,, ABU, NGN.

 (+234) 09-4616700


 Wema Towers 54, Marina Lagos Island
Lagos, LAG, NGN.

 (+234) 012669236


 Plot 84, Ajose Adeogun Street, Victoria Island, La
Victoria Island, LAG, NGN.

 (+234) 1 4618301



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At a Glance

At a Glance Source
Population in thousands (2019): 200,963.59
GDP per capita (current US$) 2019 - World Average 10,721.61: 2229.85
Account (%) age 15+) - (2014 vs 2017): 44% | 40%
Agriculture Orientation Index - Credit ( Agriculture, Forestry and Fisheries share of GDP) (2015 vs 2016): 0.17 | 0.16
Financial Inclusion Strategies: National Financial Inclusion Strategy 2018-2020 (Revised) Oct 2018
Domestic credit provided by financial sector (% of GDP) 2017: 23.28
Made or received digital payments in the past year (% age 15+) (2014 vs 2017): 37% | 30%
Remittances % of GDP for 2017: 0.061
Mortgage Interest Rate / Mortgage Term (years): 25% | 20

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