Banks’ Hidden Charges Hindering Financial Inclusion — Report

Banks are charging customers above regulatory limits and are making them pay undeclared charges, thereby hampering the country’s effort to reduce financial exclusion, a new report has said.

The report by the Innovations for Poverty Action and the Inclusion for All initiative, Measuring Fees and Transparency in Nigeria’s Digital Financial Services, released on Thursday contains the outcome of a study that examined compliance levels with existing fee structures, compliance with price transparency requirements, the reliability of transactions and the consistency of information available from customer service channels – highlighting a series of barriers that impact consumer trust in financial services.

Nigeria’s digital financial services ecosystem has rapidly evolved over the last decade due to increased broadband and mobile penetration and digital payments, which boost financial access in urban, rural, and hard-to-reach areas across the country.

This progress provides underbanked populations with greater access to digital banking products, mobile payments, savings and credit facilities – transforming the financial inclusion landscape. However, between 2018 and 2020, financial exclusion in Nigeria decreased by only 1 percentage point, from 37% in 2018 to 36% in 2020.

The report said the cost of financial services remains a major barrier to access for price-sensitive consumers, especially within marginalised, vulnerable, and lower-income segments of society.

In addition, any lack of transparency on product pricing, departures from regulated pricing and limits trust between customers and service providers.

A new collaboration between Innovations for Poverty Action and the Inclusion for All initiative aims to address the challenges and understand the ease of accessing accurate price information from providers and their levels of compliance with the revised pricing guidelines.

At the virtual launch of the report, Rashida Monguno, Director, Consumer Protection Department, Central Bank of Nigeria (CBN), commended IPA and Inclusion for All for the study, saying: “This groundbreaking research provides new evidence and insights on one of the most critical aspects of consumer protection which is pricing transparency.

“Consumers’ right to easily access and understand the cost of services they use is one of the most fundamental rights of consumers. The research provides a baseline for future audits and identifies several areas which require improvement. I trust that the results will be instrumental in exploring new conversations that will result in tangible changes in the digital financial services marketplace.”

The government regulator, the Central Bank of Nigeria (CBN), recognised the impact of product pricing on financial inclusion outcomes and reviewed pricing guidelines in 2019, issuing lowered pricing caps for electronic banking transactions effective January 2020. In addition, CBN encouraged financial service providers to restructure transaction fees and limits.

The action supports Nigeria’s digital financial services uptake, which increased during the covid-19 pandemic, where government responses such as lockdown restrictions led to the temporary closure of bank branches, reinforcing digital access.

Presenting key findings from the digital financial services audit, IPA revealed multiple areas where improvements may be required to enhance the consumer experience and assure compliance with existing regulatory frameworks.

Drawing on the new research, William Blackmon, the Financial Inclusion Research Manager, IPA, said: “Most providers do not list their prices on their website – contacting customer care can take a matter of hours. Limited pricing transparency wastes consumers’ time and comes at a high cost that lower-income customers simply cannot afford.”

Without accurate and accessible information – consumers cannot make informed decisions about the services they want to use; this reduces competition in the market. During the panel, Adedotun Ifebogun, Head, Retail & SME, Wema Bank, emphasised the need for a more holistic approach to the transparency of pricing that ensures customers’ evolving needs are met across all preferred platforms and locations.

“We are committed to understanding consumers’ preferred information points and how well and easily statements can be accessed, especially for communities at the last mile.

“Customer service has been identified as a preferred platform for consumers to get information. We see the need for training in this area to ensure good customer service since competition between banks and mobile money should be on service delivery and not necessarily on price, which is regulated. The solution will be a collaborative effort,” he said.

Speakers also exchanged perspectives on market events such as price fluctuations and promotions that affect price reliability.

Jay Alabraba, Chairman of, Association of Licensed Mobile Payment Operators (ALMPO), commented: “Even though there are challenges with price transparency and reliability, we need to acknowledge that transparency and reliability are already an industry focus. And in speaking of serving consumers best, business sustainability is critical. In a way forward, sufficient dialogue between industries and telcos is key.”

Driving debate on the reliability of transactions and the impact of infrastructure on the financial service provider ecosystem, Gbenga Adebayo, Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), said: “Several consumers are connected to Nigeria’s 2G and 3G networks which offer less reliable data access. Naturally, this impacts access to higher-quality network coverage and influences customers’ ability to transact. Further, pricing on USSD has not been transparent historically; this is a legacy issue that impacts customer confidence.”