In a bid to promote financial inclusion and instill a culture of savings, Nigerian financial institutions have rolled out countless campaigns over the years. From “Save Today, Smile Tomorrow” jingles to elaborate financial literacy drives, banks have made savings appear as the first step toward personal wealth. However, for many Nigerians—especially low-income earners—the reality has proven disheartening. Instead of growing their funds, some customers discover that excessive charges have drained their accounts. The dream of financial discipline is gradually becoming a nightmare of hidden deductions.
In Nigeria’s bid to deepen its financial ecosystem and encourage a culture of savings, bank-led campaigns have painted a rosy picture of financial stability. However, millions of Nigerians are starting to question the logic of saving in an environment where depositors are penalized with relentless fees.
Take the case of Mrs. Ijeoma Umeh, a Lagos-based petty trader who opened a savings account to gradually build capital for her pepper business. With her weekly contributions of ₦2,000, she hoped to gather enough over time to invest in a bigger shop. But to her dismay, her account balance shrunk due to a flurry of charges—SMS alerts, card maintenance fees, transfer fees, and monthly account maintenance deductions.
“I thought I was doing the right thing by saving in a bank, but each time I checked, my money was reducing. When I asked the bank, they said ‘na normal charges.’ I closed the account,” she lamented.
Similarly, Mr. Chinedu Okeke, a youth corps member posted to Kaduna, received his monthly allowance through a commercial bank. By the end of his service year, he noticed that nearly ₦10,000 had been wiped off his total savings due to various deductions. “It was discouraging. I would have been better off using a digital wallet or hiding the cash at home,” he said.
The Charges Trap
A recent study by Financial Literacy Network of Nigeria (FLNN) revealed that on average, a Nigerian saver is subjected to over 10 different categories of charges in a calendar year. These include:
- Monthly account maintenance fees
- Electronic transfer charges
- SMS and email alert fees
- Card issuance and renewal fees
- Inactive account penalties
In 2023 alone, Nigerian banks collectively earned over ₦300 billion in non-interest income from these charges, according to a Central Bank of Nigeria (CBN) bulletin. This has sparked debates about the sincerity of banks in encouraging savings.
Digital Banks vs Traditional Banks
While traditional banks continue to enforce hefty charges, many Nigerians have started migrating to digital-only platforms like Kuda, Moniepoint, and Opay, which offer zero-fee savings accounts and higher interest rates.
“I opened a Kuda account and noticed I wasn’t being charged for every small thing. That’s where I now save for my tailoring business,” said 24-year-old Uchechi from Aba.
Expert Insight
Financial analyst, Dr. Ahmed Oluwatosin, explains that while some fees are necessary to sustain bank operations, the volume and opacity of charges in Nigeria are excessive.
“Banks must find a balance. They are discouraging the very habit they claim to promote. Regulatory bodies need to step in to cap or restructure these charges,” he said.
What Needs to Change
To restore public trust and rebuild a healthy savings culture, stakeholders recommend:
- Transparent fee structures
- Regulatory caps on maintenance fees
- Introduction of interest-bearing savings with no hidden costs
- Promotion of digital banks with customer-friendly policies
- Government-backed micro-savings schemes for low-income groups
Saving money should not feel like a punishment. As long as banking charges continue to erode earnings, Nigeria’s ambition of building a financially disciplined society may remain elusive. Much ado has indeed been made about savings—but it may take a financial revolution to make it truly worthwhile.
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