Another view on e-Money and e-Naira

The Central Bank of Nigeria should be commended on their giant strides in driving E-Banking Business in the country. Without any doubt, this has helped to create and support the Federal Government’s ease of doing business in Nigeria. The use of technology to drive banking and financial transactions has led to the creation of several products driven by Debit Cards, Credit Cards, Point of Sales Machines (POS), USSD Technology, Instant Transfer and Others. It has been generally recognized that Nigeria is the leading nation in the world of E-Banking and technology-driven electronic financial transactions.

The Central Bank of Nigeria in continuation of their pioneering leadership in the E-Banking Business has introduced the E-Money/E-Naira Banking Notes into the Nigerian market to drive financial inclusion and help with the stability of the Nigerian Naira. This is another highly commendable project of the Central Bank of Nigeria, particularly with the lower transaction costs that the E-Naira will bring to money transfers and payments for merchants.

However, there has been a consistent agitation from the lower end merchants, petty traders, farmers, market women, artisans, rural dwellers and even financial inclusion experts that most of these products as commendable as they are, are too sophisticated for the low-income earners in our society. These segments of our population have phones and phone numbers, but do not use smart phones. They are not the data subscribing citizens of Nigeria and are not bank account holders or BVN registered customers.

The lower end of the market needs to be brought into the financial sector of the economy through their GSM phones and phone numbers. This is why we believe that Phone Banking through the transfer of money to the phone numbers of subscribers and redeemable through banking agents is the product missing in the array of banking products that has been introduced by the CBN. If Phone Banking is driven and encouraged by the Central Bank and the Financial Institutions, Petty Traders can do daily savings of their sales by depositing the funds with agents and their phone numbers credited instantly, thus encouraging a saving culture among the over 100 million Nigerians without BVN, Bank accounts and smart phones.

Phone Banking will not only drive the savings culture, but also help the nation to build up data and records on these segments of the populations. Phone Banking is also an opportunity to bring over 100 million Nigerians in the informal financial sector into the formal sector of the economy and help to provide a platform for credit appraisals of several citizens of the country.

The Central Bank of Nigeria has modernized banking and the way banking is done in Nigeria through various products, creative and dynamic regulatory operations and the licensing and operations of PTSP, PSSP, Switches etc. The BVN Project has also helped to drive financial inclusion but this has been frozen at a particular level.
The Phone Banking will take financial inclusion to another level. The lower income segment of the economy can receive cash transfers on their phones that they can redeem with agents, and also make savings with agents and get a credit token that can be redeemed or used to pay for goods and services when they want to. Financial Inclusion is systematically encouraged and over time, the Phone Banking customers can then be motivated to open a proper bank account through the agents or through their phones.

In the northern part of the country where we are predominantly Farmers, Cattle Herdsmen, Fishermen, Commodities Traders, Fruits and Foodstuff Traders, Product Buying Agents, truck Owners, Truck Drivers, Commodities Agents, Petroleum Product Traders, Fuel Station Owners, Petroleum Truck Owners and Drivers etc. Phone Banking will be of tremendous benefits to us and will drive out people into the financial sector on a progressive basis.

The Central Bank of Nigeria must rule that all Banks, Mobile Money Operators, Payment Service Banks and even Telecom Operators should introduce a phone banking product into the Nigerian Market. This is the real product that will help to deepen financial inclusion in the country.