Microfinance Bank Boss Decries Cashless Policy as Inimical to MFBs

Microfinance Bank Boss Decries Cashless Policy as Inimical to MFBs

Dejection and lamentations by operators of microfinance banks in the country have continued to follow the Federal Government's recent cash withdrawal limitations (cashless) policy.

Reacting to the policy, Managing Director of one of the country's leading microfinance banks, Umuchinemere Pr-credit Micro Finance Bank, (UPMFB) Enugu, Mrs. Nnenna Maria Ekete, said the emerging situation would rather constrain or hamper the business of the microfinance banks whose major clients are mainly low income earners (small scale entrepreneurs and civil servants).

Mrs. Ekete said though it's an ideal and a well intended policy, aimed at making Nigeria a cashless society, but it came at a wrong time because of the low level or poor technology awareness and mass illiteracy in the country.

She decried the introduction of the cashless policy now as something very inimical to the progress of micro finance banks operating in the country and therefore called on government to review and keep the policy on hold till such a time adequate banking technology awareness must have been created and the greater number of the citizens of the country been in a better a position to embrace it.

The Umuchinemere Pr-credit Micro Finance Bank, Enugu Managing Director implored the government to "come up with other means of payment, create adequate awareness and develop our technology of payment because the Automated Teller Machine (ATM) seems not good or reliable enough, hence people's apathy to using it, compounded by the situation that a greater number of members of the society are not literate enough to operate ATM."

The bank boss continued, "In our own case for instance, most of our clients are poor salary earners who receive their salaries through our bank because we give them small credits and we also have small entrepreneurs, so how do we take care of paying them when the policy says no corporate body can withdraw more than one million naira in one day, and for us in just one day alone we may have more than a total of five million naira to pay our salary clients that are more than 3000 persons and one million naira will not be enough to service them."

The Umuchinemere Pro-credit Micro Finance Bank, Enugu Managing Director made it clear that the ultimate goal of the bank was to make life better for the active poor and its other numerous clients, as well as make reasonable profit to sustain itself. She said the cashless policy could only be well with Nigerians only when adequate measures must have been put in place to take care of the financial needs of the numerous unbanked people and the informal sector, otherwise it would result to being counter productive against the people.

"It is the end users of cash that will surfer the cash limitation policy now because banks and other financial institutions will just spread whatever cost they make in withdrawing more than one million naira in the service charge to their innocent clients", Ekete said.

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