Abominate them or admire them, the agents are right here to end

Every morning, Raheem, a banking agent, a.okay.a POS agent at Mile 12, with no doubt one of Nigeria’s greatest markets, must obtain money for his two stalls. He can withdraw some money over the counter, however since early 2024, most business banks dangle capped day-to-day withdrawals at ₦100,000. He can’t count on customer deposits because those are inconsistent, and getting money from rather a pair of agents is pricey.

“The banks make not give out extra than ₦100,000 money now while you happen to could perhaps additionally dangle a savings memoir, so we meet supermarkets, wholesalers, and filling stations for money. It’s a mutual settlement; they must hotel money, and we need money for our business, so I don’t payment them,” a POS agent in Ketu, Lagos, suggested TechCabal.

Banking agents started shopping money from these corporations in February 2023, when the Central Monetary institution’s hasty foreign money change created a wide money squeeze. They paid ₦5,000 for each and each ₦100,000 to fuel stations and rather a pair of cash-heavy corporations and transferred the value to prospects who were paying between ₦500 and ₦700 for a ₦5,000 withdrawal.  

A court docket ruling in March 2023 compelled the CBN to change timelines for the foreign money change, fixing the money crisis. Whereas that stopped agents from shopping money, they aloof supply money from these corporations in substitute for waiving deposits. 

It’s a salvage-salvage difficulty that works however creates an unintended final consequence: a money scarcity at business banks. 

A central bank policy capping weekly over-the-counter withdrawals at ₦500,000 also contributes to the money scarcity. The regulator has tried to wean Nigerians off their money dependence and has reduce money disbursements to bank branches. The following money scarcity at the banks drives corporations to the agents, who not regularly bound out of cash.

Monetary institution branches, which count on money deposits from the central bank and prospects, dangle had to cap over-the-counter withdrawals as money-heavy corporations take their deposits to agents in desire to banking halls, extra driving Nigerians to POS agents.

“Even supposing the central bank has a ₦500,000 restrict, we are in a position to not give out extra than  ₦100,000 for each and each customer. On occasion we open with handiest ₦600,000 or ₦1,000,000, and we must be certain that of us obtain money after they nearly the banks, so we ration it,” a banker suggested TechCabal. They added that the central bank delivered money to their Ojodu branch handiest twice the previous week.

With withdrawal limits at bank branches and ATMs, prospects now talk over with bank branches for customer care points, as foot visitors at branches has “dipped,” a banker at Wema Monetary institution suggested TechCabal. 

“We’ve lowered the stress of going to the banks,” acknowledged Raheem. There are 120 POS terminals for each and each ATM in Nigeria, as there are less than 23,000 ATMs in the country and a pair of.7 million active POS terminals.

When he secures money for his stalls, Raheem, admire most agents, affords Cash-In Cash-Out products and companies for many traders, charging ₦100 on withdrawals below ₦5,000 with expenses of up to ₦5,000 looking on the transaction dimension. Agents snarl they consist of the value of lease, native govt taxes, data, transport and the trouble of retaining profit those expenses.

Day-to-day earnings vary and could perhaps additionally additionally be as puny as ₦1,000. A minimal of five agents in Mile 12 suggested TechCabal they manufacture adequate to withhold their households day-to-day. Some agents can manufacture as phenomenal as ₦25,000 day-to-day, extra than a third of Nigeria’s newly approved monthly minimal wage. 

Nigeria has approximately 1.5 million banking agents; low entry limitations and subsidised POS terminals abet force agency banking’s repute. Their ubiquity has also helped force the enhance of digital payments in Nigeria, as the value of cash transactions dropped by 36% from 2019 to 2023.