In recent years, arguments have ensued about exactly how many banks are in Nigeria.
Well, the numbers keep changing as banks undergo mergers, some liquidate and others just shut down without any official reason.
In this article, we put to rest any form or doubts or arguments about the total number of banks in Nigeria.
Meanwhile, we’ve put together the rankings of Nigeria’s top ten banks that are most profitable, with a huge asset base and quality customer care.
We will section this article into the type of banks we have in Nigeria namely: Commercial banks, Mortgage, Development, Micro-finance, Non-interest banks and the Central Bank of Nigeria.
How Many Banks Are In Nigeria?
According to the Central Bank of Nigeria, there are a total of 106 banks in Nigeria at the time of writing this article.
How about we take one after the other?
Commercial Banks
There are a total of 22 commercial banks in Nigeria.
The general role of commercial banks is to provide financial services to the general public and businesses, ensuring economic and social stability and sustainable growth of the economy.
In this respect, credit creation is the most significant function of commercial banks.
While sanctioning a loan to a customer, they do not provide cash to the borrower. Instead, they open deposit bank accounts from which the borrower can withdraw.
List of Banks in Nigeria under this category include: Access Bank PLC, Citibank Nigeria Limited, Diamond Bank Plc, Ecobank Nigeria Plc, etc.
For more information on the current list of commercial banks, check our resource article on the comprehensive list of banks in Nigeria and their headquarters.
Mortgage Banks
Reports from the Central Bank of Nigeria indicate a total of 35 banks operate under this category.
A mortgage bank is a bank that specializes in originating and/or servicing mortgage loans.
In Nigeria, a mortgage bank is a national-licensed banking entity that makes mortgage loans directly to consumers.
Some of the banks in Nigeria operating in this category are Abbey Mortgage Bank Plc, AG Homes Savings & Loan’s Limited, AKWA Savings & Loans limited, ASO mortgage bank, etc.
You can check the full list of all mortgage banks operating in Nigeria for more information about this type of bank.
Development Banks
Development banks are those which have been set up mainly to provide infrastructure facilities for the industrial growth of the country.
They provide financial assistance for both public and private sector industries. There are 6 of this type of bank in Nigeria.
The main objectives of the development bank are to promote industrial growth, develop backward areas, create more employment opportunities, generate more exports and encourage import substitution, etc.
See the names of the six development banks operating in Nigeria for more details about the types and functions of development banks.
Micro-finance Banks
There are 940 microfinance banks recognized by the CBN.
As the name implies, micro-finance institutions are bankers and lenders who provide micro-finance services, such as deposits, loans, payment services, money transfers, and insurance.
The importance of microfinance is that it provides much-needed financial services to poor and low-income households, entrepreneurs, and nascent businesses, who would otherwise not have access to such services.
List of Banks in Nigeria under this category includes A.D.A Microfinance Bank Limited, AACB Microfinance Bank Limited, AB Microfinance Bank Limited, Abatete Microfinance Bank Limited, etc.
Non-Interest banks
There are just 2 noninterest banks in the country.
Non-Interest banking operates on defining principles such as interest prohibition in debt and exchange contracts; the prohibition of uncertainty or speculative behavior in business transactions; the prohibition of any form of gambling.
It also prohibits funding of unethical concerns such as, alcohol, tobacco, ammunition manufacturing, and adult entertainment institutions; just to mention a few.
Banks in this category are Jaiz Bank Plc and TAJ Bank Limited.
Non-Interest Banks engage in partnership contracts, trading contracts, leasing contracts, and other financial services that conform to Islamic commercial jurisprudence.
Merchant Banks
In modern terms, a merchant bank is a firm or financial institution that invests equity capital directly in businesses and often provides those businesses with advisory services.
A merchant bank offers the same services as an investment bank, however, it typically services smaller clients and makes direct equity investments in them.
There are only 5 merchant banks available in the country. Check our post on the list of merchant banks operating in Nigeria and their addresses.
Merchant banks mainly work with small-scale enterprises that are unable to raise funds through an initial public offering (IPO), by providing mezzanine financing, bridge financing, equity financing, and corporate credit products.
Central Bank of Nigeria
The Central Bank of Nigeria (CBN) is the apex monetary authority of Nigeria established by the CBN Act of 1958 and commenced operations on July 1, 1959.
The major regulatory objectives of the bank as stated in the CBN Act are to:
- maintain the external reserves of the country
- promote monetary stability and a sound financial environment,
- and to act as a banker of last resort and financial adviser to the federal government.
The mandate of the Central Bank (CBN) is derived from the 1958 Act of Parliament, as amended in 1991, 1993,1997,1998,1999 and 2007.
The CBN Act of 2007 of the Federal Republic of Nigeria charges the Bank with the overall control and administration of the monetary and financial sector policies of the Federal Government.
The Objectives of the CBN are as follows:
- ensure monetary and price stability;
- issue legal tender currency in Nigeria;
- maintain external reserves to safeguard the international value of the legal tender currency;
- promote a sound financial system in Nigeria; and
- act as a banker of other banks and provide economic and financial advice to the Federal Government.
Consequently, the Bank is charged with the responsibility of administering the Banks and Other Financial Institutions (BOFI) Act (1991) as amended.
It has the sole aim of ensuring high standards of banking practice and financial stability through its surveillance activities, as well as the promotion of an efficient payment system.
So, when asked, “how many banks are in Nigeria today?”, I’m sure this article has gone a long way to present you with the best answer.
What did you think? Let’s have your opinion in the comment box provided below.
Even More Topics:
How many federal regulated banks are in Nigeria?