The Nation Newspaper Northern communities where absence of banks cripple economic activities
Banks demand utility bill, prevent people without electricity supply from opening accounts Residents bank under bed, ground, othersSmall scale businesses in many rural communities in the northern part of the country are faced with existential challenges following the absence of commercial banks in their neighbourhoods. Many of them have resorted to primitive ways of banking, thereby depriving the economy of the gains that come with saving money in banks.
After spending so much to get to a bank in Bauchi, Ibrahim heaved a sigh of relief, thinking that he would thereafter begin to take orders from any part of the north and the country at large. But his hope was dashed.“My place is not connected to electricity, yet when I went to open a bank account they asked me to provide a utility bill.
“That would not have been the case if there was power supply or a commercial bank in the community. We need both to make life meaningful for us and to help our businesses grow.” “The distance between my residence and the closest bank is about 45 kilometres. The bank is inside Bauchi and I am staying in Liman Katangu.“We don’t have any bank in our community. Whenever I am going to the bank, I spend N4,000 on transportation. So, it is not easy for me and other people in my community to go to the bank.”
“I went there like three times but didn’t get the required attention. I was pissed off by the unpleasant outcome.” Gombe State coordinator of Maize Farmers Association of Nigeria, Adamu Tukur, in a chat with The Nation, lamented the effects of not having bank accounts on his people’s businesses. Adamu also confirmed allegations of banks demanding utility bills from rural people without power supply.
Asked how the people save their money, Adamu said: “Rural people in this area don’t keep cash. When they come to town to dispose their goods, they use their money to buy goats, sheep clothes and other things. Most of the time, they don’t hold excess cash.” Many of them can now take orders from outside their communities but they still strongly believe that PoS cannot adequately address their problems.“We have only one person doing PoS business here but he hasn’t come for quite some time now,” Awual said. “Before the advent of PoS, business was on cash-and-carry basis. If you didn’t have cash to pay, I would not release my goods to you.
“In spite of this, I wish we have a bank very close to our community. Our association discusses this from time to time. In place of utility bill, Unegbu said, “what they could have done to solve the problem is to ask them to get letters of introduction or some form of identification from community heads or their emirs or Obas so that they will be able to open accounts.
“The more money they save the better for the economy and the more investment that those monies will yield.” “Those services they render to people are just one-off. There is no proper banker-customer relationship. “The process was not properly done for them to get their NIN. There was no population commission near them for them to get their NIN. “Those are the problems that they face in rural communities. That is why digital services may be difficult to operate.”The failure of the Central Bank of Nigeria to execute its proposal to accelerate financial inclusion with rural banks has in no small measure dampened the confidence of the people in government agencies’ promises.
By the guidelines, they are expected to have a minimum capital base of N5 billion with capital adequacy ratio of 10 per cent or as may be prescribed by the CBN from time to time. Also, the guidelines provide that these rural banks are expected to be technology-driven and are expected to conform to the best practices of data storage; security and integrity.
On the other hand, the central bank listed the non-permissible items the banks shall not carry out to include “grant any form of loans, advances and guarantees; trade in foreign exchange market; undertake any other transaction which is not prescribed in the CBN Regulation on the Scope of Banking and Ancillary Matters, No. 3, 2010.”
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