Because the rationing of money by banks continues to push Nigerians to POS operators who’re making a kill of the rise in patronage, Festus Akanbi writes on the pains and the absurdity of the money crunch at a interval of a constant rise in currency-in-circulation
Nothing aptly captures the present absurdity in Nigeria’s cash provide statistics higher than the truth that at a interval when the rise within the quantity of foreign money in circulation is giving the Central Financial institution of Nigeria sleepless nights, Nigerians do not need entry to satisfactory money to fulfill their each day obligations as banks’ ATMs seem like working dry.
Cash Provide statistics from the CBN as of January 2024 revealed that foreign money in circulation (CIC) surged by 163% in January 2024 to N3.651trn from N1.39trn (January 2023).
In the identical vein, foreign money exterior banks (COB) grew by 314% to N3.28trn in January 2024 from N0.79trn (January 2023). This suggests 89.86% of the foreign money in circulation (CIC) was exterior the banking system as of January 2024, marking a notable rise from the 57.14% recorded in January 2023 following a number of months of the CBN’s naira redesign.
In accordance with the newest cash and credit score statistics information of the CBN, Forex in circulation elevated by N890 billion in three months beneath the present governor, Olayemi Cardoso. The quantity of foreign money in circulation (CIC) has elevated by about N890 billion between September 2023 and December 2023.
Analysts are nonetheless questioning concerning the whereabouts of this extra money within the wake of the report that industrial banks lately set withdrawal limits on their automated teller machines (ATMs), a improvement that has created strain for money, particularly within the nation’s casual sector.
A report by the Nigeria Inter-Financial institution Settlement System (NIBSS) reveals that the quantity of ATM money withdrawals within the nation has declined persistently over the previous few years, whereas the variety of transactions processed via POS machines has seen a big surge.
In a society that also depends on the usage of money regardless of the recognition of the apex financial institution’s cashless coverage, the rationing of money by banks has shifted consideration to POS operators who’re stated to be making a kill of the elevated prospects’ site visitors to their operation.
Hoarding
Analysts alleged that banks might be hoarding money to promote to POS, thereby limiting the quantity prospects can get at a interval when the apex financial institution has repeatedly assured Nigerians that there’s sufficient money to go spherical.
On November 2, 2023, the CBN stated the shortage skilled in some places was as a result of a excessive quantity of withdrawals from its branches by banks and panic withdrawals by prospects from ATMs.
Whereas the shortage continued, the apex financial institution, on December 13, blamed the scenario on hoarding, stating a lot of the money given to banks was within the arms of people.
Many Nigerians claimed that as a result of financial institution ATMs had lately failed them, they’re left with the selection of visiting POS operators to withdraw cash for on a regular basis transactions because the money rationing takes a deeper toll.
Like in lots of unlucky conditions, Nigerians have continued to pay dearly for his or her reliance on the POS platform. Aside from paying exorbitant costs to those operators, many individuals have fallen sufferer to the fraudulent actions of some patrons of POS.
These operators, typically seizing upon the desperation of residents for money, resort to exorbitant costs, successfully preying on weak people. Such practices not solely drain monetary sources but additionally erode belief inside the neighborhood.
Furthermore, these exploitative acts exacerbate the monetary burdens of many Nigerians, perpetuating a cycle of financial hardship. Situations of fraud additional compound the problem, leaving victims not solely financially depleted but additionally disillusioned by the shortage of regulatory oversight.
Rationing Money
In some banks, account holders can withdraw between N150,000 to N40,000 per day whereas prospects utilizing one other financial institution’s ATMs are restricted to between N20,000 and N10,000, relying on the monetary establishments. Some prospects nevertheless alleged that in actuality, a few of these figures should not normally complied with, suggesting that some financial institution workers are colluding with POS operators to disclaim prospects entry to money.
THISDAY survey of Awolowo Highway Ikoyi, Lagos final week confirmed that a lot of the banks’ ATMs weren’t restocked as banks’ safety males have been waving prospects away from their premises, signalling that the ATMs weren’t allotting money.
THISDAY in Abuja, Ibadan, and Port Harcourt gathered that it’s the identical expertise as prospects need to strategy POS operators within the neighbourhoods.
A petty dealer within the Agege market, Mrs. Angela Mathew informed our correspondent final week that she has stopped going to banks’ ATMs as a result of she has not been capable of withdraw greater than N20,000 this 12 months.
She stated: “I typically use POS beside my home, they might not be protected, however I’ve a girl I belief.”
One among her prospects who spoke with THISDAY corroborated her, saying: “In a lot of the ATMs, regardless of being the financial institution buyer, you’ll be able to’t withdraw greater than a certain quantity; at my financial institution, I used to be knowledgeable it was N10,000. I needed to go to the counter to take N20,000.
Costs by the POS operators range from one space to a different. Within the extremely populated areas of Lagos, costs are normally reasonable as operators depend on their turnover for his or her good points. In areas like Olambe, Akute, space of Ogun State as an example, prospects pay as a lot as N300 for a N5000 withdrawal and N500 for N10,000. Nonetheless, in high-brow areas like Ikoyi and Victoria Backyard Metropolis, folks pay as much as N500 for N5000 and N1000 for N10,000.
In a discover to prospects, a financial institution suggested withdrawals needs to be restricted to at least one financial institution card per transaction when utilizing the corporate’s ATM to keep away from money scarcity.
“To make sure uninterrupted entry to money withdrawals via our Automated Teller Machines (ATMs), we kindly request that you just restrict your withdrawals to at least one financial institution card per transaction when utilizing our ATMs,” the financial institution (names withheld) stated.
The discover added, “This measure goals to forestall cases of money shortages that will happen when people use a number of playing cards from totally different banks in a single ATM transaction, surpassing the utmost each day withdrawal restrict per particular person. This observe could inadvertently limit different prospects’ entry to money.”
Eroding Confidence
The President of the Affiliation of Small Enterprise House owners in Nigeria, Mr. Femi Egbesola, was quoted as saying the present money disaster would have a detrimental impact, stressing that folks’s confidence within the system could be undermined by what’s presently taking place.
“Individuals are making an attempt to get their companies structured and take their monies to the financial institution. With what is going on now, the arrogance is eroded. Folks, principally within the micro sectors, want money for his or her each day transactions,” he stated.
Along with the complaints over the rip-off by the POS brokers are complaints over incidents of fraud related to the system. Many deposits are stated to have been wiped away as their accounts turned compromised after their publicity at POS centres.
ATM’s Deficit
Nigeria requires about 60,000 ATMs to fulfill up with its rising inhabitants of 216 million folks and a banking inhabitants of 106 million adults, based on Tope Dare, government director of Inlaks, the most important ATM operator within the nation, which controls over 50% of the market.
The variety of ATMs then grew from 11,000 in 2011 to 16,000 round 2016 and 21,000 in 2019.
It grew to 22,600 in 2021, the place it has remained as of December 2023, a sign that funding available in the market has diminished.
Given the 22,600 lively ATMs, Dare defined that there’s a deficit of about 37,400 ATMs. Because the variety of bankable adults retains rising and extra playing cards are issued, it’s anticipated that ATMs will lower in quantity over time, for the reason that banks should not deploying extra ATMs.
Though it’s simple to explain the recognition of POS channel as a part of the transfer to take site visitors away from banking halls, nevertheless, the disaster generated by poor administration of the POS and different channels underscores the pressing want for complete measures to safeguard customers and maintain accountable those that exploit the monetary vulnerabilities of others for private achieve.
