IN the wake of the ill-timed, and shoddy implementation of the CBN’s economic crippling policy of currency change, many unbanked and banked Nigerians have subscribed to various means of saving and accessing cash for their daily upkeep. Naturally, the orthodox banks, (irrespective of the generation) are supposed to tap into the opportunities provided by the poorly conceived cashless policy, however, other banking platforms (mostly faceless) had arisen as beneficiaries of the digitization of our national economy. Given the history of orthodox banking system, with the ulcerous sores created by the collapse of some banks,
THE Hope is rationally concerned at the emergence of many digital banking, Fintechs and Neo-banks platforms. Despite the fact that some of these ‘new’ online banks are duly registered, we are concerned that the wind that blew and brought losses to the pap maker would surely make the flour maker bankrupt.
ADDED to these are the loan sharks who give loans to many Nigerians at exorbitant rates of interest. When people default, crude methods such as incessant damning calls to families and friends who were neither privy to the loans, nor guarantors; postage of false and demeaning advertorials on online platforms about their debtors, as well as blocking their phones are engaged.
However, due to the failure of Nigeria’s orthodox banking system to understand the fact that most Nigerians need small capital for their entrepreneurial activities; the informal sector rely mostly on loans to operate and survive and that these set of individuals may lack the huge collateral base to finance such loans; many Nigerians are forced to patronise these sharks and money lenders who eventually ruin not only the business, but also the psyche of the entrepreneurs, and these had destabilising effects on both personal and national economies.
MANY community banks had sprung up in the past to fill this gap, however, many of these have also folded up due to volatile and negatively dynamic economic environment in which they operate. Unfortunately, the operations of the ‘big’ banks in Nigeria is skewed towards collecting from the poor to enrich the rich, who often take huge loans without repayment. By reason of the nation’s financial and monetary policy, it seems that the apex bank had literally thrown Nigerians into the mouth of the Sharks.
MANY Nigerians have yielded to many of these digital banking, Fintechs and Neo-banks due to the inefficiency of the orthodox banks. For example, many have testified that when it comes to bank transfers, these online banks are faster and more reliable than the various apps of the orthodox banks. Therefore, convenience of use, seamless internet-based experience and low fees have been the selling points of these online banks. While the risk is understandable, many unbanked market women, artisans, and other workers in the informal sector have migrated to these platforms, and used them as ‘transfer’ collection and dissemination platforms.
HOWEVER, our worries remain that many Nigerians are ignorant of the offices, agents or representatives of these ‘banks’ when issues arise. Furthermore, if and when these banks collapse, as has been the case in the past, many would lose their life earnings, and savings, without having a place to seek redress. One thing however stands strong, that is that Nigerians are willing to be banked, and follow government’s regulations, but government in itself is ill-prepared to protect and provide the enabling environment for trust and obedience. WE at The Hope therefore conclude that the inefficiency of government and the poor service delivery of the orthodox banks have increased the financial risks of dutiful Nigerians.
AS convenient as these digital banking, Fintechs and Neo-banks have been, research has however identified a high percentage of subscribers have been “victims through phishing emails, data breaches, unauthorised access to accounts through USSD, and others.” Other security threats like hacking, phishing, virus and e-fraud have also been identified as being able to exploit vulnerabilities in digital systems. To this end, therefore, there is the need for caution and alertness to mitigate the negative outcomes of the adoption and subscription to digital banking by consumers.
THE Hope, in the light of government’s adoption of cashless economy, insists that government must develop the necessary measures to curtail the risks incurred by Nigerians on the digital banking platforms. For Nigerians, we encourage that adequate research must be engaged to determine the registration, authenticity and financial health status of these digital banks before patronising them.
WE encourage the CBN to revisit the operational guidelines of orthodox banks in Nigeria, and make it easier for both old and new customers develop a good banking culture with them. The various multiple charges, poor internet network, low interest rate on savings and dehumanising treatments of people at the gates of these various banks should be curtailed. Also, special assistance should be given to community banks who operate in rural and remote areas where the orthodox and new generation banks have refused to set up their branches.
