The parable of Nigeria's Financial inclusion policy
Aisha went to open a bank account for her daughter who has just gotten admission into a university. Some of the KYC requirements, among other things, was to submit a utility bill, or a rent receipt. However, Aisha lives in her own house, she pays electricity and water bills online, from her bank account. This is a serious challenge to most parents, and Nigerians desiring to get involved in the traditional banking system in Nigeria.
"I can't remember the last time I saw a utility bill receipt", Usman told me. He does all those transactions online. His bankers normally sends him statements of account at the end of every month. All he does is print them and keeps for records purposes, or when 'NEPA' or water board people come around.
In Nigeria, we take 3 steps at good policies, and 4 steps reversal. At the heart of all this policies confusion is the Central bank of Nigeria (CBN). With the advent of the Bank Verification Number (BVN), the issue of submitting a utility bill for address confirmation was supposed to be an obsolete requirement.
Imagined Ardo, who lives in a Ruga, where the best structure is a thatched hut with no water or electricity. But Ardo and his herdsmen have a collection of over five thousand cows, over five hundred goats and sheep. Their transactions rangers between 5-8 million naira every 3 months but they can only do that through proxy accounts of Miyetti Allah or some random persons they meet in the bank.
When ever you enter any market in Nigeria, you will be encouraged with one form of money lending outfit or the other. These entrepreneurs have their own money and lend it to who ever they wants and at their interest regimes. Mean while the CBN, in trying to regulate the industry cap a hefty requirement for licensing a Financial company.
Part of this requirement as obtained from the 'Revised Guidelines for Finance Companies in Nigeria' (April 2014) stated thus:
i. A non-refundable application fee of N100,000 (One hundred thousand naira
only) in bank draft, payable to the Central Bank of Nigeria.
ii. Deposit of the minimum capital of N100 million (One hundred million naira only)
in bank draft made payable to the Central Bank of Nigeria. The capital thus deposited together with the accrued interest will be released to the promoters
on the grant of the final licence.
iii. Satisfactory, verifiable and acceptable evidence of payment by the proposed
shareholders of the minimum capital of N100 million.
Out of the top 10 poorest states in Nigeria, 9 are in Northern Nigeria, as shown in NBS data. Highest form of illiteracy and insecurity are also a great concern in the North. These are areas the CBN must show structural concern to make in road in campaign for financial inclusion.
How can these poor people access financial instruments if there are few actors in the financial ecosystem to cater for their needs? If stringent and obsolete policies are a hindrance, can the policy make impact?
The ministry of communication and digital economy must streamline some of these blockades to financial inclusion, along side the CBN and other supervising agencies.
"I can't remember the last time I saw a utility bill receipt", Usman told me. He does all those transactions online. His bankers normally sends him statements of account at the end of every month. All he does is print them and keeps for records purposes, or when 'NEPA' or water board people come around.
In Nigeria, we take 3 steps at good policies, and 4 steps reversal. At the heart of all this policies confusion is the Central bank of Nigeria (CBN). With the advent of the Bank Verification Number (BVN), the issue of submitting a utility bill for address confirmation was supposed to be an obsolete requirement.
Imagined Ardo, who lives in a Ruga, where the best structure is a thatched hut with no water or electricity. But Ardo and his herdsmen have a collection of over five thousand cows, over five hundred goats and sheep. Their transactions rangers between 5-8 million naira every 3 months but they can only do that through proxy accounts of Miyetti Allah or some random persons they meet in the bank.
When ever you enter any market in Nigeria, you will be encouraged with one form of money lending outfit or the other. These entrepreneurs have their own money and lend it to who ever they wants and at their interest regimes. Mean while the CBN, in trying to regulate the industry cap a hefty requirement for licensing a Financial company.
Part of this requirement as obtained from the 'Revised Guidelines for Finance Companies in Nigeria' (April 2014) stated thus:
i. A non-refundable application fee of N100,000 (One hundred thousand naira
only) in bank draft, payable to the Central Bank of Nigeria.
ii. Deposit of the minimum capital of N100 million (One hundred million naira only)
in bank draft made payable to the Central Bank of Nigeria. The capital thus deposited together with the accrued interest will be released to the promoters
on the grant of the final licence.
iii. Satisfactory, verifiable and acceptable evidence of payment by the proposed
shareholders of the minimum capital of N100 million.
Out of the top 10 poorest states in Nigeria, 9 are in Northern Nigeria, as shown in NBS data. Highest form of illiteracy and insecurity are also a great concern in the North. These are areas the CBN must show structural concern to make in road in campaign for financial inclusion.
How can these poor people access financial instruments if there are few actors in the financial ecosystem to cater for their needs? If stringent and obsolete policies are a hindrance, can the policy make impact?
The ministry of communication and digital economy must streamline some of these blockades to financial inclusion, along side the CBN and other supervising agencies.
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