Standard Chartered Bank closes half of its Nigerian branches as it veers towards digital banking

STANDARD Chartered Bank has closed up to 50% of its Nigerian branches over the last few months as part of its ongoing digitisation programme that has seen it move the provision of many services online.

Nigeria is one of the key African markets in which Standard Chartered Bank, the London-headquartered multinational banking and financial services firm operates. In December, these closures peaked with the bank only keeping 13 branches open  compared with around 25 that it was operating before the exercise commenced.

Lenders are now deploying mobile money services on a vast scale across Nigeria to tap into the market of the unbanked population thought to total approximately 38m adults. Financial analyst Dataphyte estimates that this market was worth about N26.2trn ($63.44bn) during the first 11 months of last year.

Formidable competition from mushrooming fintech companies means players who arrived in the agency banking market late like Standard Chartered Bank, are struggling to gain traction. Keen to make up lost ground,. the bank is now firming up mobile banking operations at the same time enlisting agents to expand its clientele.

Standard Chartered Bank has centred its operations on corporate banking since it launched in Nigeria but it is giving increasing attention to retail banking. This has led to the introduction of digital lending aimed at easing access to soft loans and ramping up the size of retail credit.

Many banks including big lenders see agency banking as a cost-saving alternative to setting up branches and a veritable strategy suitable for reaching rural areas and financially excluded communities. Nigeria's rural area have historically been under-banked with local farmers in particular having no access to loans.