According to the report dated August 15, 2024, the figure shows that NIBSS has been pivotal in shaping Nigeria’s financial infrastructure, especially in its role of enabling digital transformation in banking.
The BVN was introduced by the Central Bank of Nigeria (CBN) in 2014 as a biometric identification system for bank account holders, aimed at reducing fraud, enhancing security, and ensuring transparency within the banking sector.
It also serves as a unique identifier that helps banks verify the identity of their customers across different financial institutions.
It will be recalled that enrollments for the Bank Verification Number (BVN) by bank account holders in the country increased from 61.47 million as at April 2, 2024 to 62.7 million in July 2024, indicating that a total of 854,267 account owners have registered for the BVN over the last few months.
As of December 2023, the total registered BVN stood at 60 million, according to data obtained from NIBSS and with the 65 million verified bank holders, this suggests that that database has grown by over 4 million so far this year.
According to the Managing Director/CEO, Premier Oiwoh, NIBBS upgrades its systems continuously. A reason for this is that NIBSS was established to carry on business as a service oriented institution providing mechanisms for problem-solving innovations.
He maintained that with 65 million Bank Verification Numbers (BVN) holders enjoying the products offered by the financial services institutions, NIBSS plays a major role in facilitating the technology-based innovations that make for seamless financial transactions.
Reacting to the development, industry experts noted that the increase for the BVN is attributable to the December 2023 directive of the CBN, which ordered all banks to freeze any account not linked with BVN by April 2024.
However, concerns remain high regarding the large segment of the population (40%) that remains financially excluded.
According to EFInA Access to Finance (A2F) 2023 survey, Nigeria in the last two years has reported changes in the population dynamics evidenced by increased urbanization of the population and despite a gradual young and digitally savvy population and marked boost in entrepreneurial activities, the disparity between BVN registrations and actual bank account ownership highlights ongoing challenges in achieving full financial inclusion.
Managing Director, APT Securities, Kurfi Garba, explained that many Nigerians are still unaware of the benefits of having a bank account or the process involved in obtaining one.
He said, “Financial literacy is low, and there are misconceptions about the banking system that deter people from participating. Also, some communities have a deep-rooted mistrust of formal banking institutions based on their experiences in which some lost money and never got it back. This cultural preference for handling money in tangible forms contributes to the high unbanked population”.
Kurfi added that although there are efforts from the regulatory authorities to improve the situation, there could be the promotion of mobile wallets and payment service banks, which require less stringent identification compared to traditional bank accounts.
For her part, former Chief Economist at Coronation Merchant Bank, Chinwe Egwim, enhancing the overall economic environment, reducing unemployment and technology are seen as crucial steps toward increasing financial inclusion.
Egwim said, “Banks and regulatory bodies need to invest in advanced cybersecurity technologies and practices to protect BVN data from breaches and unauthorized access. There should be ongoing efforts to educate the public about the importance of BVN registration, its benefits, and how to safeguard their information”.
By addressing these concerns proactively, Nigeria can leverage the benefits of the BVN system while mitigating associated risks and ensuring a secure and inclusive banking environment”.
