Home Business Microfinance banks ready to go cashless, says association scribe

Microfinance banks ready to go cashless, says association scribe

by Business News Report

The National Association of Micro Finance Banks (NAMFB), on Tuesday, expressed readiness of its members to key into Federal Government’s cashless policy. The Executive Secretary of the association, Mr Kabir Yar’Adua, made the disclosure in an interview in Abuja. He said the cashless policy was a revolution that would improve the lives of Nigerians, especially those at the grassroots.

He added that “I think this policy is a revolution for us. It is a combination of mobile banking and agency banking which is a bit ahead of even the ATM. “The decision is good and it will benefit the market women, house wives, vulcanisers and people at the bottom of the pyramid in the country. As part of our role, we have embarked on capacity building and training for our members on how agency banking works and how it is being done.

“We are encouraging our members and also talk with a number of mobile money companies to ensure that the policy is adequately implemented.’’

Yar’Adua said the association was in the process of signing a Memorandum of Understanding (MoU) with 25 licenced mobile companies to ensure inclusion of its members in the scheme. He said the policy would help to ensure that more people were included in the banking sector “like in Kenya.

“In Kenya, about two million accounts were created overnight because of mobile banking, where scratch cards and mobile phones were used to save and withdraw money from agents. A vulcaniser who wants to save N500 can just buy scratch card from a nearby agent and perform the transaction.

“Such a vulcaniser will be able to save time and money that he will have used to go to the bank just to deposit N500.’’ The scribe of the association said the implementation of the cashless policy would increase availability of jobs as it would require more agents to perform many jobs in the process. “A recent research shows that a mobile company needs at least 50,000 agents to make impact like that of Kenya annually. The beauty of this system of employment is that it does not require any form of expertise; it could be a trader or anybody with mobile phone and a gadget given to him by the mobile company.’’ On the challenges that could be encountered, Yar’ Adua said the mobile money and agency companies would need to ensure proper screening of the agents.

He said the association and the companies must work together to monitor the agents to ensure their effectiveness and faithfulness to their clients. On the 83 closed MFBs in the country, the executive secretary said it was a good thing for the association as it gave assurance to their clients that the MFBs were properly monitored and regulated.

He added that the closure showed that the MFBs were doing well as more than 80 per cent of them were still functional after the exercise. 

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