Shettima urges Nigerian banks to take immediate action to curb exploitative PoS charges and address cash availability to promote financial inclusion.
Vice President Kashim Shettima has called for immediate action from Nigerian Deposit Money Banks (DMBs) and the Central Bank of Nigeria (CBN) to address the exploitation of Nigerians by Point-of-Sale (PoS) operators who impose arbitrary and excessive charges. Speaking at the 2024 Bankers’ Committee Retreat in Abuja, Shettima stressed that these practices are detrimental to financial inclusion and hinder the growth of Nigeria’s economy.
Shettima, represented by Dr. Tope Fasua, Special Adviser on Economic Affairs, raised concerns over the growing complaints from Nigerians regarding the exorbitant fees charged by PoS merchants. He described these practices as a “moral hazard” that creates barriers for Nigerians, especially in emergencies when access to cash is crucial. He also pointed out issues of adverse selection in the sector, particularly with street-side PoS operators, which exacerbate the financial strain on the public.
He stated:
“Nigerians complain bitterly that they are unable to access even minimal cash when most needed. There seems to have been some moral hazard and adverse selection problems with the involvement of street-side PoS merchants.”
Shettima called for urgent regulatory measures from the CBN and banks to ensure PoS charges are fair, transparent, and reasonable, emphasizing that a concerted effort can effectively tackle these issues and provide much-needed relief to the public.
The Vice President also addressed the critical issue of cash availability, highlighting its direct impact on financial inclusion in Nigeria. He urged banks to guarantee a seamless supply of Naira notes to the public, asserting that without sufficient cash availability, Nigerians will continue to rely on exploitative PoS operators. He remarked:
“We would like to take this opportunity to appeal strongly to the committee to urgently clear up thorny issues in the sector, some of which are impeding the efforts at financial and economic inclusion.”
His remarks further emphasized that resolving cash availability issues is key to reducing the dependence on PoS merchants and improving financial inclusion across the nation.
Shettima also urged banks to enhance support for Micro, Small, and Medium Enterprises (MSMEs), a vital sector for Nigeria’s economic growth. He encouraged financial institutions to deepen their engagement in providing financing for MSMEs and back government initiatives aimed at building a sustainable consumer credit culture. He emphasized that fostering a strong MSME ecosystem is essential for diversifying Nigeria’s economy away from its reliance on oil.
During his address, Shettima touched on the broader economic reforms being rolled out under President Bola Tinubu’s administration, such as the unification of the Naira exchange rate and the removal of fuel subsidies.
He urged Nigerians to remain patient, citing early indicators of progress, such as the rise in non-oil exports and a trade surplus, which signal positive shifts in the country’s economic outlook.
Shettima also underscored the importance of innovation and risk management in Nigerian banking, particularly in the face of growing fintech and neobank developments. He stressed:
“This has greatly metamorphosed recently… our banks must continue to be deft and nimble even in the face of higher capital requirements.”
He noted that Nigerian banks have established a dominant presence in West Africa and beyond, pointing to recent expansions like new bank branches in France, highlighting their growing influence on the global financial stage.
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