Why Nigerian Banks shutdown 649 ATMs in 2020
Nigerian Banks shutdown 649 ATMs in 2020, here is why
According to reports from the International Monetary Fund, commercial banks in Nigeria will close 234 branches and 649 Automated Teller Machines (ATMs) by the end of the year 2020. (IMF).
This was revealed in the Financial Access Survey 2021 Trends and Developments report published by the global financial institution.
Financial Access Scores in several countries have fallen by as much as 7 percent in the wake of the nationwide closure of banks and ATM service points, according to the reports (FAS). Nigeria received a 4.44 out of a possible 5, down from a 4.78 in 2019.
In order to monitor Target 8.10 of the 2030 Sustainable Development Goals, the International Monetary Fund employs two FAS indicators, which are known as the FAS Indicators (SDGs). According to this SDG, domestic financial institutions should be strengthened in order to increase the availability of banking and financial services.
For example, according to the International Monetary Fund, the number of commercial bank branches per 100,000 adults and the number of ATMs per 100,000 adults are the two most frequently used FAS indicators.
Several FAS indicators, including these two critical ones, as well as 12 additional FAS indicators out of a total of 64 used by the IMF, showed declines in Nigeria, according to the report.
A decline in the number of commercial bank branches in Nigeria, which has fallen from 5,392 in 2019 to 5,158 in 2020, according to the financial institution, is the cause of the reductions enacted.
Additionally, the decline in bank branches resulted in a 649-point decline in ATMs in Nigeria, resulting in an average of 18,810 ATMs in 2020, down from 19,459 ATMs in 2019. This represents a 649-point decline from the previous year.
Additionally, the country's financial access score decreased to 17.19 in 2020 from 16.14 in 2020 in terms of the number of ATMs per 100,000 adults as a result of this, from 16.14 in 2020.
What are the reasons for the expected decrease in the number of ATMs in 2020?
Financial Access Score for 2021 provides an indication of how well financial access fared during the pandemic, according to the International Monetary Fund (IMF).
Banks in Nigeria were forced to close their branches temporarily or permanently due to the devastating effects of the COVID-19 pandemic, which forced people to stay indoors and use remote banking models, among other economic shocks.
Rapid closures of branches and ATMs are also a result of the increasing use of digital and mobile banking solutions.
Annual instant payment statistics for Nigeria were released by the Nigerian Inter-Bank Settlement System (NIBSS) for 2020, and the data shows that mobile transactions (both mobile and USSD) increased in Nigeria in 2020.
These payments increased in value by 82.6 percent, from 928.86 million in the previous year to 1.69 billion in the current year.
Additionally, the National Institute of Business and Statistics (NIBSS) predicts that the number of POS transactions will reach 77 million in 2020, an increase of nearly 40% from the 46 million transactions recorded in 2019.
Essentially, Nigerians are rapidly shifting away from cash and toward contactless and digital modes of payment, putting increased pressure on traditional financial institutions. One of the consequences has been a reduction in the number of bank branches and automated teller machines (ATMs) across the nation.
A growing number of people will find themselves with less reason to visit physical branches as more digital and personalized financial services become available to them. As a result, we can expect the number of ATMs to continue to decline in the foreseeable future.
