Reported by: Ijeoma G | Edited by: Gabriel Osa
LAGOS, Nigeria — The nation’s banking sector has undergone a marked contraction in its physical footprint over the past year, with 229 bank branches closed nationwide as customers increasingly shift to digital payment channels and point‑of‑sale (POS) transactions, according to newly released data from the Central Bank of Nigeria (CBN) and industry reports. Analysts say the trend reflects a structural transformation in how Nigerians access financial services, even as it raises questions about financial inclusion and access to in‑person banking services in underserved communities.
According to the 2024 Financial Sector Statistical Bulletin, the total number of deposit money bank branches — including commercial, merchant and non‑interest banks — fell from 5,373 in 2023 to 5,144 in 2024, representing a reduction of 229 physical branches across the 36 states and the Federal Capital Territory. This decline occurred despite an increase in the total number of licensed banks from 33 to 35 during the same period, underscoring how rapidly banking is migrating from traditional brick‑and‑mortar outlets to electronic platforms.
Industry analysts attribute the closures to a significant rise in digital payment adoption, particularly through POS terminals, which have become a preferred alternative to in‑person banking for everyday transactions. The volume of POS transactions jumped from 9.85 billion in 2023 to 13.08 billion in 2024, a roughly 33 per cent increase in usage year‑on‑year, while the value of these transactions more than doubled, soaring from ₦110.35 trillion to ₦223.27 trillion.
Although automated teller machine (ATM) usage also recorded modest growth, its increase was minimal compared with the surge in POS activity. ATM transaction volumes grew marginally from 1.01 billion to 1.02 billion, with the total value rising from ₦28.21 trillion to ₦29.12 trillion, reflecting slower adoption relative to electronic payment channels.
Experts say the closure trend reflects broader shifts in consumer behaviour and technological penetration across Nigeria’s financial ecosystem. As digital wallets, mobile banking apps and POS terminals become more accessible, many Nigerians — particularly in urban and peri‑urban areas — are opting to conduct transactions remotely, reducing foot traffic to physical branches. Financial sector analysts link the surge in electronic payments to factors such as cash scarcity episodes, the expansion of agent banking networks and the convenience of digital access closer to homes and markets.
However, the impact of branch closures has been uneven geographically. Lagos State, the country’s largest economics hub, remained home to the highest number of bank branches (1,521 in 2024) even as it recorded an 11‑branch decline from the previous year. Other states experienced steeper contractions: Ebonyi State lost 89 branches, its network shrinking from 120 to just 31; Oyo State saw 26 closures; Niger State declined by 32 branches; while Ekiti and Ondo states each lost 18 branches. Other states, including Anambra, Ogun, Cross River and Plateau, also posted reductions.
Despite these closures, a number of states bucked the trend, recording net additions to their bank networks. Delta State added six branches, Rivers State gained eight, and Edo, Kaduna and Kano states each recorded increases of eight branches. Smaller additions were noted in Katsina, Adamawa, Jigawa and Kogi states, suggesting that branch expansion — albeit limited — is increasingly tied to areas with rising commercial activity and population growth.
The contraction in physical banking infrastructure coincides with sustained growth in Nigeria’s fintech sector, where mobile wallets and digital banking platforms have carved out significant market share by appealing to tech‑savvy, convenience‑oriented consumers. Traditional banks have strengthened their digital offerings in response, increasingly encouraging customers to use online platforms, mobile apps, USSD services and POS channels for transfers, payments and routine financial needs.
While the shift has been welcomed by many for its efficiency and cost‑effectiveness, concerns remain over access for rural and underserved communities where internet connectivity, mobile coverage and digital literacy may be limited. For individuals who rely on face‑to‑face interactions — including older populations and small business owners with limited digital access — the loss of physical branches could complicate access to essential financial services.
Industry observers also highlight the implications for jobs and local economies, noting that branch closures often result in workforce reductions and reduced commercial activity in neighbourhoods that depend on bank services. They argue that while digital channels offer clear benefits, policymakers and banks should balance technological progress with strategies to ensure inclusive access and mitigate potential disenfranchisement of vulnerable customer segments.
The Central Bank of Nigeria and individual banks have not yet issued comprehensive public responses to the latest closure data, but the trend aligns with global movements in the banking sector, where technology adoption and changing consumer preferences continue to reshape how financial services are delivered. The realignment of banking footprints may accelerate further as more Nigerians embrace digital financial services and the economics of branch operations evolve.
As the sector adapts, stakeholders stress the importance of robust digital infrastructure, secure payment systems and targeted support for financially excluded populations to ensure that the benefits of a digital banking era are widely shared across the country.
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