Per-Capita Access to Finance is Better in Abuja than in Lagos

Here is a quick bite of a statistical fact: The total number of financial access points in Lagos are 2,248. Compared to this, Abuja Federal Capital Territory (FCT) has only 1,193 access points.

Lagos is better than Abuja - isn't it? But wait, we need to read this statistic by putting it in context with population. With a low population, Abuja FCT has a better access, 8.48 access points per 10,000 people while Lagos has 2.46 per 10,000 people as at the end of 2014.

Stumped? Yes, the fact is that people living in Abuja FCT have better access to financial services than those living in Lagos merely because Abuja FCT isn't as populated as Lagos is. And, therefore, even though Lagos has more number of financial access points, it is not just sufficient for this highly populated city of Nigeria.

What are Access Points?

Access Points are all the possible point of contacts setup by the financial institutions that offer financial services such as savings and loans to the people. They include Commercial Banks, Microfinance Banks, Savings and Credit Cooperatives, Microfinance Institutions etc. The access points (point of contacts by the financial institutions) could be like the bank offices, motorparks (where transactions of some savigns and credit groups happen), post offices, ATMs, mobile POS (Point of Sale devices) etc.

Access Points are an important indicator for measuring performance of financial inclusion because availability and access are critical to the masses.

Per-Capita Access to Finance

In statistics, this is called 'per-capita availability of financial access points'. In a layman's language it can simply put as 'financial institutions in Lagos are not just sufficient to meet the demands of the growing population in Lagos'.

Lets take a deeper look at what's going wrong and why Lagos has low per-capita access to finance.

	Lagos	Abuja FCT
Total Population	9,113,605	1,406,239
Financial Access Points	2,248	1,193
Access Points Per 10,000 People	2.46	8.48

As you could see from the above table, its obvious that Abuja FCT, with a population of 1.4 million has 1,193 access points that translates to 8.48 access points per 10,000 people. Lagos on the other hand, is 8 times more populated than Abuja but with only twice the number of access points than Abuja.

Commercial Banks Per-Capita Access to Finance

Per-capita Access to Finance is more worse when we study the commercial banks in Nigeria. In the past, the total number of financial access points by Commercial Banks in Lagos are 1,504. Compared to this, Abuja Federal Capital Territory (FCT) has only 324 access points. However, with a low population, Abuja FCT has a better access, 2.3 access points per 10,000 people while Lagos has 1.6 per 10,000 people.

'Access to Finance' in other parts of Nigeria

No prize for guessing the condition of other parts of Nigeria when Lagos itself isn't properly equipped to offer enough financial service points. The per-capita access to finance in other parts of Nigeria is not very encouraging. Lets take a look at this graph:

Leading Questions and Conclusion

The situation across the country is best summarized by the above image. Majority of the places in Nigeria have a very poor per-capita access to finance. Infact most of them are less than the median line (less than 1 access point per every 10,000 people).

Also, the entire focus is on Abuja FCT and to a great extent we can include Lagos but what about the rest of Nigeria? 75% of Nigeria still lives in rural areas where access to finance is sparingly lowest.

What responsibilities does the government have towards providing infrastructure to financial institutions? What responsibilities does the private sector have towards making access to finance reach more and more people with a good mix of economies of scale? Should we just focus on making Abuja FCT a better place to live without developing the rest of Nigeria?

What do you think can be done to make this situation better? Share your opinions in the comments below. 

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