- By Saka Khaliq
- culled from: http://businessworldng.com
Following the kick-off of cashless banking in Lagos, the Central Bank of Nigeria(CBN), has exempted microfinance banks natiowide from the policy, BusinessWorld Intelligence can now reveal. To this end, microfinance clients as well as microfinance banks can now continue to deposit and withdraw above the apex bank's set limit.
The apex bank had earlier pegged cash withdrawal and lodgement limits by individual to N150, 000 and N1 million for corporate bodies, as its implementation commenced in banks within Lagos metropolis earlier in the year. Virtually all banks within the state have started the implementation of the cashless banking policy.
However, investigation shows that microfinance industry in Nigeria fully operate a cash-driven system, such that majority of transactions in the sub-sector are done through cash movement.
Only few customers embrace electronic banking as the use of ATM points by microfinance clients is very rare. Some, it was learnt, also engage in cheque transactions, but a large proportion rely on naira notes to engage in business dealings. The high illiteracy level in the sub-sector makes it difficult for cashless banking policy to work, with customers unwilling to buy into this initiative.
While customers in most cases deposit more than the said limit, they also withdraw above the stipulated limit, especially at the end of the month, when most small companies had to offset employees' salaries.
BusinessWorld Intelligence also revealed that credit canvassers of MFBs, are responsible for every transaction (withdrawal and lodgement) of their customers. All transactions are pulled together and this withdrawal is done en-masse by MFBs through their corresponding banks, which in most cases exceed this limit.
The apex bank had earlier pegged cash withdrawal and lodgement limits by individual to N150, 000 and N1 million for corporate bodies, as its implementation commenced in banks within Lagos metropolis earlier in the year. Virtually all banks within the state have started the implementation of the cashless banking policy.
However, investigation shows that microfinance industry in Nigeria fully operate a cash-driven system, such that majority of transactions in the sub-sector are done through cash movement.
Only few customers embrace electronic banking as the use of ATM points by microfinance clients is very rare. Some, it was learnt, also engage in cheque transactions, but a large proportion rely on naira notes to engage in business dealings. The high illiteracy level in the sub-sector makes it difficult for cashless banking policy to work, with customers unwilling to buy into this initiative.
While customers in most cases deposit more than the said limit, they also withdraw above the stipulated limit, especially at the end of the month, when most small companies had to offset employees' salaries.
BusinessWorld Intelligence also revealed that credit canvassers of MFBs, are responsible for every transaction (withdrawal and lodgement) of their customers. All transactions are pulled together and this withdrawal is done en-masse by MFBs through their corresponding banks, which in most cases exceed this limit.
read more about it here: http://businessworldng.com/web/articles/2244/1/CBN-Exempts-MFBs-from-Cashless-Banking/Page1.html
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