By Elizabeth Adegbesan
AGENTS of Financial Institutions and Mobile Payment Operators have called for the intervention of the Central Bank of Nigeria (CBN) to address the challenges of excessive service charge and inadequate funding plaguing the agent banking system.
The agent banking system was introduced in 2013 by the CBN as part of its efforts to increase financial inclusion by increasing access to financial services. Under the system, financial institutions (FIs) and mobile money operators (MMOs) can appoint third parties as agents to provide financial services on their behalf to members of the public.
Financial Vanguard investigations revealed that most of the agents are bedevilled with funding challenges aggravated by high interest charges and unfair service charges.
Speaking to Financial Vanguard, Adebayo Oluwasola, a Quickteller agent, said: “Funding the business has been difficult due to the high interest rate on bank loans. The banks are not helping matters as interest rates on loans are high. What is the need of getting a loan when the profit from the business is not enough to repay the interest or even the principal?
“The Central Bank of Nigeria should look into this issue so that we would have access to loans with less interest and be able to fund our business.”
On his part, Adeoye Abiodun, an agent of Paga and Diamond Yello account, said: “Sometimes when people want to use the PoS to withdraw huge amount of money, I tell them there is no network whereas there is no cash. But if I can get a loan with low interest rate I would be able to do those cash transactions and the business will grow.”
A First Bank Agent, who pleaded anonymity, confirmed these concerns. He said that most of the agents are struggling due to financial constraint, adding that access to cheap fund is necessary for agent banking to make the desired impact on the banking system.
Adeoye also complained about unfair service charge by FIs and MMOs. He said: ”The charges on agent banking and Paga transactions are high. Like Firstmonie, you pay N100 charge for every transaction. Even if you want to send N500, the banks will still deduct charges at the end of the month. The commission the banks promised to us is also not forth coming.
“The only area we earn little income is when we charge customers for money transfer, which is not part of the rules and regulation that guides the business. But you have to pay for shop, power, staff before you fend for yourself.”
Oluwasola also complained about Quickteller charges describing them as exorbitant, adding that high transaction charge is another factor responsible for low profitability in the agent banking business. This was corroborated by the Firstbank agent who pleaded anonymity.
He said: ”There is a lot of cheating with respect to PoS transaction charge, and the CBN should intervene. When a customer wants to withdraw N15, 000, they (FIs and MMOs) will charge N125. To deposit N15, 000 is N150. Meanwhile when we charge N200 for deposit or withdrawal, the customer complains, thinking all the money goes into our pocket.”