Shonubi Highlights Path to Greater Financial Inclusion

By Nume Ekeghe

The Deputy Governor, Operations Directorate Central Bank of Nigeria, Mr. Adebisi Shonubi, has said operators of agency banking in the country can significantly increase financial inclusion if they offer customers more than just pay and receiving money services.

He said this at the Nigerian- South Africa Chamber of commerce (NSACC) webinar held recently, where he spoke, on ‘Digital Economy and the Opportunities in Nigerian Banking Industry.’

Shonubi, also pointed out that the first half of the year saw an increase in new account opening, growth and in cashless transactions and also an increase in electronic channel fraud.

On agency banking, he urged banks be more creative in ways to attract customers by firstly focusing on offering the unbanked services they need and that current method in place does not encourage enrolment of new customers.

Shonubi explained: “The narration of agent tends to be driven by financial institutions who are looking at pay and receive services and that assumes that there is someone who is already within the system and wants to carry out a transaction.

“And if you have two people who are not within the existing financial system, it becomes difficult. So, you have already limited people who can participate. It therefore suggests also that you are looking at this as an alternative or compliment to what you already have which is either a POS or internet banking.”

The CBN Deputy Governor added: “The first thing we need to realise is that an agent is actually helping with communication and the education for people. It is not about the transaction first and most times we are thinking is about the money and how much is transferred and how much cash does he keep.

“It is actually about educating that would engender confidence in the system rather than going to ask people to open account to transfer money.”

According to him, the role of the agent is misunderstood because the intent was driven by those who are putting it in place which are the financial institution, who see it largely as an extension of their branches.

Furthermore, speaking on the increase in banking activities and transactions in the first half of 2020, he said: “We have seen a growth in transactions to about 50 per cent. One of the upsides of COVID-19 is that people aren’t moving a lot and using as much cash and therefore resorted to a lot of more electronic channels.

“And in the evening when people were allowed out, people would troop to the ATMs to take cash out. Part of the increase in also the increase in volume.

“I also feel that the number of people that are in the banking system especially the newer customers may not be as conversant in term of training and knowledge on the best practices to put in place so that may have made them a bit more susceptible to fraud.

“But we would see how it pans out for the rest of the year and if the fraud rates come down, we would know that bleep was as COVID inspired,” he added.

THISDAY had reported that the value of electronic payment transactions through the point of sale (PoS) terminals, Nigeria Interbank Settlement System Instant Payment (NIP) and Electronic Fund Transfer (NEFT) increased significantly by 82 per cent to N11.676 trillion in May 2020, compared with the N6.421 trillion recorded in April 2020.

The spike in e-banking activities in the month was necessitated by the lockdown in the country then, as part of efforts by both the federal and some state governments to contain the spread of COVID-19 in the review month.

According to the report, the value of PoS transactions in May was N358 billion, which was a 31.63 per cent increase from the N245 billion recorded in April; while NIP transactions increased by N10.405 trillion, up by 48.44 per cent when compared with the previous month.

Similarly, NEFT transactions stood at N912.29 billion in May, which was an 11 per cent increase, compared with the N811.76 billion recorded in April.