*Despite the Central Bank of Nigeria’s recent directive to commercial bank customers to report difficulties experienced with withdrawing cash from their bank branches, while sanctioning erring banks, report indicates there is growing opposition against mobile money agents using handy Point-of-Sale machines to provide essential services to consumers amid claims that some are exploiting the country’s current financial plight to compound the citizens’ cost-of-living crisis聽

Isola Moses | 绿帽献妻

In view of the relative scarcity of cash at banks’ Automated Teller Machine (ATM) points and other payment outlets in Nigeria in recent times, mobile money agents have become a familiar sight across the West African country, using handy Point-of-Sale (PoS) machines to provide essential services to millions of people without access to banking, especially in hard-to-reach rural areas.

Even on the streets of major cities, they have become a go-to, due to an ongoing shortage of cash at ATMs (Automated Teller Machines) since a much-vilified redesign of the national currency, the Naira, last year, AFP report said.

Chi Etche, a 29-year-old media executive, was quoted to have related his experience: 鈥淭here are three of them (agents) on my street alone.

鈥淭his means I don鈥檛 need to take a bike or cab to reach the nearest bank ATM.鈥�

Dr. Olayemi Cardoso, Governor of CBN

But opposition is growing to their activities, with claims that some are exploiting the country鈥檚 financial plight, compounding the worst cost-of-living crisis that Nigerians have faced in decades.

Ibrahim Adamu, a 39-year-old trader, said: “We are now buying back our money from (point-of-sale) PoS agents. 鈥淭he commission they charge is increasing and you can hardly get cash from the machines.鈥�

CBN urges consumers on ATM cash withdrawal issues, threatens ‘stringent penalties’ against banks

In 2013, the Central Bank of Nigeria (CBN) announced a drive to improve access to financial services across the country.

Likewsie, the banking sector regulator in the country recently directed commercial bank customers to report difficulties experienced with withdrawing cash from their bank branches, or Automated Teller Machines (ATMs) from December 1.

Dr. Olayemi Cardoso, Governor of CBN stated this Friday, November 29, during the 2024 Annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN), in Lagos.

绿帽献妻 reports several bank customers and other consumers have expressed difficulty and disappointments over their inability to access funds at several banks’ ATM points in Nigeria for several weeks.

Checks indicated that many consumers are being compelled to patronise Point of Sales (PoS) agents to get cash for transactions.

Cardoso, in his address on the occasion, however, urged consumers to make reports through the banking regulator鈥檚 designated phone numbers and e-mail addresses.

The CBN Chief stated: “Effective December 1, 2024, customers are encouraged to report any difficulties withdrawing cash from bank branches or ATMs directly to the CBN through designated phone numbers and email addresses for their respective states.

鈥淚 repeat, financial institutions found engaging in malpractices or deliberate sabotage will face stringent penalties.鈥�

According to Cardoso, the Bankers’ Bank will continue to maintain a robust cash buffer to meet the West African country鈥檚 needs, particularly during high-demand periods such as the festive season and year-end.

The CBN’s focus, he affirmed, is to ensure seamless cash flow for Nigerians while fostering trust and stability in the financial system.

A bank cutomer withdrwaing Naira notes from the ATM聽

According to Enhancing Financial Innovation and Access (EFInA), an NGO, by the end of last year, at least 74 percent of adults in Nigeria had access to financial services. Just over half (52 percent) used traditional banks.

The Central Bank of Nigeria鈥檚 decision and the cash crunch, however, have given ordinary Nigerians reliant on cash no alternative but to use agents, experts say.

鈥淐BN policies simultaneously raised barriers for banks to offer cash and cash alternatives to their customers in pursuit of its cashless policy mandate,鈥� said Ikemesit Effiong, a partner at Lagos-based risk consultancy SBM Intelligence.

Agents, however, often operate without identity checks of their customers or regulatory oversight, he added.

Capped cash withdrawals

The CBN announced that it was redesigning the naira in October 2022.

Soon after, Godwin Emefiele, the CBN governor at the time, then ordered a cap on cash withdrawal from ATMs and in banking halls as the presidential election approached.

鈥淥ver 85 percent of cash that is in circulation is outside the banks,鈥� he said at the time.

Vaunted as part of the Bank鈥檚 cashless policy push, the restrictions put pressure on businesses, sparked angry protests, and gave mobile money agents leverage to exploit the cash shortage.

ATM withdrawals are still capped at 20,000 Naira ($12.45) per day when withdrawing from one鈥檚 own bank.

Withdrawals from another bank are restricted to just 5,000 Naira a day.

Over-the-counter withdrawals of large sums attract punitive charges.

Moreover, long queues in banking halls and frequent ATM service downtimes worsen the problem.

That has driven more people towards mobile money agents, said Uzoma Dozie, the founder of challenger bank Sparkle.

鈥�Excessive fees鈥�

Many Nigerians accused bank officials of diverting cash meant for ATMs to agents for personal gain.

鈥淪ome agents exploit cash scarcity by charging excessive fees for cash withdrawals and transactions,鈥� Dozie told AFP.

鈥淗owever, this practice isn鈥檛 inherent to the mobile money system but rather a symptom of broader cash availability issues and inadequate oversight.鈥�

A few agents said they also get their cash to run their businesses from other sources.

鈥淚 go to markets to buy cash from traders and bureaux de change.

“I factor that into the commission I charge customers when they come to withdraw cash from me,鈥� said Ayo Olaoluwa, 34.

Ifeoma Onwuabuchi, 46, got started with about N100,000.

鈥淭hat鈥檚 why you see a lot of people coming into the space. The income is not big but it helps keep me moving,鈥� Onwuabuchi said.

A Spokesman for the influential Association of Mobile Money and Banking Agents of Nigeria did not immediately respond to AFP鈥檚 request for comments.

However, Dozie insisted that proper regulation and enforcement can address the concerns while preserving the 鈥渂enefits of agent banking鈥�.

CBN governor Olayemi Cardoso insisted that empty cash machines will not be tolerated and warned that defaulting banks 鈥渨ill face stringent penalties鈥�.

鈥淲e also urge full regulatory compliance by all stakeholders, including Mobile Money Operators and PoS Agents, to promote digital transaction channels and improve service delivery,鈥� he said.

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