The introduction of the agency banking by the Central Bank of Nigeria (CBN) in a bid to further ease the stress associated with financial transactions has been a mixed bag of fortunes; BENJAMIN UMUTEME reports.
More than 17 years after the President Olusegun Obasanjo-led government made it possible for the Global System of Mobile Telecommunications (GSM), the impact of that decision has been phenomenal.
The revolution of GSM in the socio-economic life of Nigerians has been immense, leading to a drastic change in the way people do business in the country. From agriculture to science and technology, ICT, finance, the story is no longer the same pre-2001.
In a bid to key into this new trend, the Central Bank of Nigeria (CBN) introduced its cashless policy meant to reduce the use of cash in daily business transactions and more of the use of cash.
Understanding financial inclusion
Financial inclusion, which aims to “make financial services accessible at affordable costs to all individuals and businesses, irrespective of net worth and size respectively”, is important for the development of any economy.
It means that people who have better access to financial services through traditional, bank accounts and digital payments have greater control over their money, and their savings, securing business loans, insurance and are better prepared for financial emergencies.
Financial inclusion is also important for achieving some of the UN’s Sustainable Development Goals, such as eradicating poverty, improving gender equality, and creating jobs.
Also, it promotes gender equality; easy access to financial services for women translates to participation in the nation-building process and economic growth of any country.
In 2017, the World Bank Global Findex Database report on financial inclusion put the number of Nigerians without bank accounts at more than 60 million.
Advance of mobile money operation
Furthermore, the drive by Nigeria’s Apex Bank to reach the country’s unbanked population led to the cashless policy and with it came the Mobile Money Operation (MMO), meant to fast track business transaction within and outside the country.
In introducing the MMO, the CBN was hopeful that agent bankers that would deliver financial services outside the conventional banking hall relying on technology for real time transactions.
In the nations’ federal capital territory, Abuja, agency banking is a thriving business as the numbers of residents that patronise banks have reduced drastically.
Speaking to our correspondent, Mr. Anthony Nze, an agent banker in Jikwoyi, a suburb of Abuja, said that since he started the business there has not been a dull moment. According to him, he gets an average of 300 hundred people who are coming to send or collect money.
“When a banker friend introduced me to the business, I was sceptical about putting the little money that I had saved. However, when he continued to pressure me, I told myself that I had nothing to lose even if the business does not grow.
“So, I did the registration and started with N150,000, but looking back a year after, I continue to thank my friend for being a friend indeed,” he said.
In Pegi Estate in Kuje Area Council of the FCT, the story is the same. Some of the residents told Blueprint Weekend that they hardly go to the bank to carry out transaction except it becomes absolutely necessary.
For Patrick Andrew, who resides in the Estate, the mobile money agents are everywhere in the estate. “Many of us no longer go to Kuje before we can get money for the weekend.
“These days, whenever I want to pay any bill, I just go with my ATM card to the agent banker close to my house. It has indeed saved me lot of stress, he said.”
A trader in second-hand clothes, Blessing Ikechukwu, speaking on mobile money told Blueprint Weekend that mobile money has made it easy for her to transact her business without having to move about with huge cash.
Madam Blessing, as she is fondly called by her fellow traders at the Nyanya Market, told our correspondent that “all I do now is to just travel to Kano with my ATM card, and after negotiating with my customer, we both go to a mobile money agent in the market and carry out the transfer and I return to Abuja with my goods.
“Mobile money has helped eliminated the BP I used to have before due to the huge amount I carry from Abuja to Kano.”
Operators kick against excessive charges
In spite of its seeming success, agents of financial institutions and mobile payment operators are not finding the business environment it easy.
Many of them claim the banks were making it difficult for them to do business successfully. They called on the Central Bank of Nigeria (CBN) to address the challenges of excessive service charge and inadequate funding plaguing the agent banking system.
According to Irabor Endurance, a Quickteller agent, “Funding the business has been difficult due to the high interest rate on bank loans. The banks are not helping matters as interest rates on loans are high. What is the need of getting a loan when the profit from the business is not enough to repay the interest or even the principal?
”There is a lot of cheating with respect to PoS transaction charge, and the CBN should intervene. When a customer wants to withdraw N15, 000, they (FIs and MMOs) will charge N125. To deposit N15, 000 is N150. Meanwhile when we charge N200 for deposit or withdrawal, the customer complains, thinking all the money goes into our pocket.
“The Central Bank of Nigeria should look into this issue so that we would have access to loans with less interest and be able to fund our business.”
Another agent, who simply identified himself as Sola, said the business is not moving as it should be due to his inability to access cheap fund to boost the business.
According to him, “after exhausting the cash he has, I idle away in the shop unable to meet customers demand. And it is not good for business as I have lost some people who used to patronize me to other operators.”
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