ON THE MONEY: Agency Banking Is Creating Wealth For More Nigerians - LEADERSHIP
SEPTEMBER 13, 2021
High unemployment, economic hardship and quest for survival are some of the factors now driving many Nigerians to take advantage of the opportunities created by the Central Bank of Nigeria-led financial inclusion initiative. The current economic woes of many Nigerians have obviously awakened their survival instincts in the face of somewhat hopelessness.
Buoyed by the sudden reality of unemployment and the need for survival after graduation from the University about four years ago, an Abuja based point of sale (POS) operator, Adamu Abubakar said it was obvious he had to think out of the box to survive in an excruciating economic condition, caused by insecurity, bad governance and later coronavirus pandemic that ruined the global economy since its outbreak in 2019.
“After graduating from school, there was no job for me at that moment so I needed do something to do for survival,” he said. Abubakar ended up as a sales representative in a Kitchen utensils shop, a business he did for two years in Kaduna state.
The realization that his N25,000 monthly salary cannot effectively take care of his increasing responsibilities forced him into setting up a SIM card sales and registration business with a meager capital. “But I later thought of a business I could do along with it. Then, I came up with POS business since I could use the same kiosk.”
Abubakar raised N100,000 in startup capital to commence his agent banking business. He made application to one of the commercial banks and later launched his agent banking business in a slum at the Jabi area of the Federal Capital Territory, Abuja.
Depending on transaction inflows or rate of customers to his 2 by 2 meters kiosk that is looking into a smelly shallow drainage, Abubakar said “I make between N3000 and N5, 000 daily.” That means Abubakar makes an average of N75,000 monthly from his agent banking business.
The CBN, in the circumstance and in collaboration with critical stakeholders in the digital financial ecosystem, such as the Nigerian Communication Commission, commercial banks, mobile money operators and telecommunication companies have conducted several study tours of other jurisdictions that have made significant progress in driving financial inclusion.
The key objective of setting up PSBs is to enhance financial inclusion by increasing access to deposit products and payment/remittance services to small businesses, low-income households and other financially excluded entities through high-volume low-value transactions in a secured techn;ology-driven environment.
In view of the challenges to effective outreach to rural communities as well as the
need to complement the services provided by other licensed entities, the CBN
issue approved the licensing and operations of Payment Service Banks (PSBs) in Nigeria, in accordance with its National Financial Inclusion Strategy (NFIS) seeks to ensure that over 80 per cent of the bankable adults in Nigeria have access to financial services.
Besides the wealth creation, more jobs are now springing in the sub-sector. About 200,000 jobs are reportedly created already through the agent banking operation.
Another operator who simply identified herself as Chiamaka said the need to increase revenue as a hair stylist gave birth to the idea of getting a point-of-sale machine to participate in the “money spinning business” because she discovered “it is interesting and profitable,” she told our reporter.
“Sometimes I gain more money than the SALOON itself. So, I am really enjoying it,” Said Chiamaka in excitement. She has been in the business for one year. Her plan is to expand it and make more money.
According to some of the operators who spoke with our reporter, charges by the licensed financial institution from every transaction is dependent on the amount of transaction carried out at every point. On every N1000 to N10,000 transacted at the point-of-sale, a fixed amount is automatically deducted by the host institution.
The purpose or wallet machine are giving by an agent. In every transaction, there is a flat rate of 25% per deposit. N10, 000 is 25 naira, N20,000 is N37. He told this newspaper that N80 is charged by the banks on every N20, 000 to N80, 000 transaction.
The business is not without risks or dangers. There are various experiences how some operators have fallen victims of fraud and criminality, including armed robbery. Like Abubakar, another operator, Emmanuel Endurance said some experiences could be frustrating. He quickly point to his experience of fake transaction alert that was sent to his mobile phone number by a suspected fraudster. Endurance he got credit notification from the fraudster to authenticate an electronic fund transfer of N10,000. “I would interest you to know that I only got to know that it was fake alert when the said transfer never entered my account,” he said.
Some of the operators also complained of ubiquitous network failure for e-transactions. In Nigeria, internet broadband connectivity is still at a low rate, resulting in drop calls and financial transactions. “It is very stressful and annoying because some customers can be very frustrating,” Emmanuel said.