BVN enrolments in Nigeria hit 54 million

Afeez Odunoye
*Number of enrollments rise by 2.3 million | *133.5 million active accounts expose gaps in CBN’s financial inclusion drive
BVN
Bank Verification Number

Biometric Verification Number (BVN) enrolments in Nigeria hit 54,241,963 on April 17, Technext has found. According to data released by Nigeria Inter-Bank Settlement System (NIBSS), the body saddled with eliminating bottlenecks in the country’s banking sector, enrolments by bank account owners in the country rose by 2.3 million in the last three months.

At the end of December 2021, enrolments for the number stood at 51.9 million. Checks revealed that the BVN database grew by six million in the year. Also, NIBSS data showed that active bank accounts in the country stood at 133.5 million as of December 2021.

Why this matters

Across the world, conventional security systems (password and PIN) face regular compromises. Thus, there is a high demand for greater security for access to sensitive or personal information in the Banking System.

Nigerian bank customers were first mandated to enrol for Bank Verification Number (BVN) in February, 2014. Image credit: ThisDay

BVN is a biometric technology with a secure unique identifier to analyse human characteristics as an enhanced form of authentication for real-time security processes.

To drive this, biometric technologies have been used to analyse human characteristics as an enhanced form of authentication for real-time security processes.

In Nigeria, the Central Bank of Nigeria launched, in collaboration with the Bankers’ Committee, NIBSS, and a German firm, Dermalog, the $50 million BVN project on February 14, 2014. The partnership had a simple aim: capturing biometrics of all bank customers and giving them a unique identity that can be verified across the Nigerian banking industry.

Why is the BVN important?
  • The unique identifier ensures that Customers’ Bank Accounts are protected from unauthorised access.
  • It helps address issues of identity theft, thus reducing exposure to fraud.
  • It is accepted as a means of identification across ALL Nigerian Banks just as it helps to standardise the efficiency of banking operations.

But, there are loopholes and setbacks in guaranteeing these benefits.

Bottlenecks

In February 2022, the House of Representatives, the lower chamber of Nigeria’s bicameral National Assembly, initiated a probe into the 1.2 trillion naira funds held by 45 million accounts without BVNs. The probe blamed some commercial banks for holding the funds and the CBN for failing to enforce its own guidelines and sanctions.

The Punch newspaper raised a similar concern in its February 21, 2022 editorial, CBN, explain 45m accounts not linked to BVN. In the piece, the national newspaper queried the weakness of regulators in Nigeria’s banking sector.

The paper wrote, “At inception in February 2014, the CBN and its partners presented iron-clad arguments for enrolment, mandating the banking public to register or have their accounts rendered inoperable after the original deadline of March 2015.

“Like most good policies in Nigeria, however, the implementation has been compromised, which is a shame. The initial deadline of March 2015 was shifted to June 2015. When that failed, the CBN shifted it to October 2015.” 

Poor enforcement of the BVN rule only deepens digital financial crime.

Poor enforcement of the BVN rule only deepens digital financial crime.

Between 2012 and 2014, Nigeria lost $157.5 billion to illicit financial flows, the highest in the continent, says the President, Muhammadu Buhari.

According to the New York-based Brooklyn Institute for Social Research, Nigeria, along with South Africa, DR Congo, and Ethiopia combined, account for half of the illicit financial flows out of sub-Saharan Africa.

CBN Governor, Godwin Emefiele is a critical figure in driving new BVN enrolments in Nigeria, Image credit: Nairametrics.

For headways in the BVN problem, the CBN has to set a definite time frame on how and when it would enrol all bank account holders onto the BVN scheme. Nigeria’s financial system stands to gain so much from this, from protecting customers to ensuring integrity and punishing delinquent behaviour appropriately.

What 54 million BVNs mean

Figures released by the NIBSS revealed that there are over 122 million bank accounts in Nigeria as of June 2019.

According to the NIBSS data, out of the 122.4 million bank accounts in the country, only 72.9 million accounts were active as of the end of June 2019.

More than one year later, in 2020, Nigeria’s active bank account increased by 14.41% from 97.485 million active accounts to 111.54 million, data from the NIBSS revealed.

Nigeria recorded a total of 160,038 bank accounts for the period under review, 30.31% of the accounts translating to 48.5 million accounts were dormant. However, the percentage of dormant accounts reduced within the period under review when compared to the April 2020 figures, while the absolute number increased.

In December 2021, the total number of bank accounts in the country increased to 191.4 million compared to 124.8 million it stood as of December 2019, according to NIBSS.

The latest figure means Nigerian banks between 2019 and 2021 registered 66.6 million new accounts.

A breakdown of the total bank accounts shows that there are 49.8 million current accounts, 120.4 million savings accounts, 8.9 million corporate accounts and 179.2 million individual accounts.

Out of the total, only 133.5 million of the total accounts were recorded as active out of which 122.3 million are individuals accounts.

Further analysis of NIBSS data showed that Nigerian banks processed at least 51.9 million Bank Verification Number (BVN) – now 54.2 million – registrations in the last seven years, of which 44.5 million are active.

Using the December data, 191.4 million bank accounts, 54 million are the ones with BVNs. This means that about 137.2 million bank accounts, and possibly more, are without BVNs.

There is no data on how many out of the 137.2 million registrations are active bank accounts, but 54.2 registrations are less than half of the number of bank accounts reported.

BVN was introduced in 2014 by the CBN to combat money laundering, illicit financing and duplications in the ownership of bank accounts used for fraud, but 137.2 million accounts without BVNs tell a story we all do not want to hear.


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