It Will Be Painful – Fintech And Telco Expert Predicts Impact Of CBN’s New Cashless Policy On Nigerians
As the new directive from the Central Bank of Nigeria (CBN) placing a limitation on cash withdrawals for individuals and corporate organisations continue to spark mixed reactions from Nigerians who argue that it is yet one out of the many policies of the present CBN Governor Godwin Emefiele, designed to frustrate Nigerians especially young entrepreneurs, a fintech expert Adekunle Fabiyi, has, expressed mixed feelings about the new policy.
Fabiyi told Neusroom that the policy will allow the government effectively take control of the circulation of cash in the country. According to Emefiele, N2.73 trillion of N3.23 trillion currency-in-circulation was outside of the vaults of commercial banks.
This is coming on the heels of the redesigning of the Naira notes which was formally unveiled by President Muhammadu Buhari on Wednesday, November 23, 2022.
According to the new directive:
“The maximum cash withdrawal over the counter (OTC) by individuals and corporate organisations per week shall henceforth be ₦100,000 and ₦500,000 respectively. Withdrawals above these limits shall attract processing fees of 5% and 10%, respectively.
“Third-party cheques above ₦50,000 shall not be eligible for payment over the counter, while extant limits of ₦10,000,000 on clearing cheques still subsist.
“The maximum cash withdrawal per week via Automated Teller Machine (ATM) shall be ₦100,000 subject to a maximum of ₦20,000 cash withdrawal per day.
“Only denominations of ₦200 and below shall be loaded into the ATMs.
“The maximum cash withdrawal via point of sale (POS) terminal shall be ₦20,000 daily.”
Fabiyi who is the Chief Commercial Officer, Itex, an integrated payment platform, said that this policy will help the government take control of the volume of cash in circulation and help combat money laundering. He added however that 36% of the adult population is still unbanked, hence, it might be painful for them to adapt to this new policy.
He said that the new CBN policy on cash withdrawal could not have come at a better time as the country needs to take control of the movement of cash.
He said: “We need to deal with the issues of people burying cash in soak-away pits because of the fear of taking such ill-gotten funds to the bank; we need to deal with the issues around money laundering, we need to deal with the insecurity surrounding the movement of cash from one place to the other; we have to deal with the issues of kidnappers collecting cash as ransom and a host of other myriads of problems bedevilling developing economies like ours.”
The former MTN executive said that If properly managed, the rule around controlling cash withdrawals will help address a lot of financial issues. He however noted that as good as the plan was, about 36% of the adult population in Nigeria is still unbanked or not enjoying any form of financial inclusion benefits at the moment.
He said: “I am not sure of the analytics done by the CBN to peg the withdrawal limit at POS point to N20,000 per day. Is this amount adequate or not? Time will tell.”
Fabiyi noted that as the country produces fewer and fewer notes, Nigeria will save more of the funds that should have been used to keep printing new notes and such savings can be applied to other infrastructural developments that can impact the lives of people.
He said: “Overall, the new policy might be painful at the beginning, but I think it is the way to go. Fintech companies like ITEX will also be challenged to spread further into underdeveloped parts of Nigeria to onboard more adults into the financially included bucket.”
