How inclined are Nigerians to Alternative Banking Channels (ABC)?

Today (Monday 3, June, 2013), the cash-less policy of the Central Bank of Nigeria enters a new phase as the maximum ceiling of N150,000 placed on conversion of third-party cheques to cash by individuals takes off. The implication is that any cheque above N150,000 originating from a third party must be lodged into the beneficiary’s account.

The question on the minds of many Nigerian would be how to adapt to this change, considering our inclination for transacting business with physical cash (usually considered a surer means for making and receiving payment) as against other alternative means. As for me, one question that I keep asking is “how prepared are Nigerians for the use of alternative banking channels?

Alternative banking channels, also known as Branchless banking is defined by Wikipedia as a distribution channel strategy used for delivering financial services without relying on bank branches. They  are methods used to provide banking services directly to customers without physical contact. These can include Internet banking, automated teller machines (ATMs), POS devices, EFTPOS devices and mobile phones.  In those days, expanding the bank’s business meant adding more branches at high real estate and licensing costs. That problem has been largely addressed by the invention of new low cost channels. Also, these alternative channels should come as a huge relieve to customers who will not have to spend long hours driving, queuing and waiting at the banking halls. The difference between the time it will take a person to queue in a banking hall to withdraw money, and the time it will take to withdraw money from an ATM or conclude financial transactions on a mobile phone is remarkably wide.

The Challenge

The challenge to alternative banking in Nigeria stems primarily from high level of technological illiteracy amongst Nigerians, especially the older generation. This ignorance is copiously manifest in the deployment of the information and communication technology (computers, mobile devices and related gadgets) to our everyday tasks, in spite of its growing relevance to our daily deliverables, either at home, in the market, or office. Beyond phone calls and SMS, the mobile (even the basic phones) have been designed to facilitate access to greater, easier and quicker services from service providers, be it in the education, health, financial and aviation etc sector.  In spite of the reported remarkable number of Nigerians who are hooked up on GSM lines, the actual number and distribution (men, women, younger, older) of Nigerians who are taking full advantage of the privileges these technology offers for improved service delivery still stands at a dismal point. The statistics is also no doubt skewed.


Consequently, the campaign for the cashless policy must be taken beyond enlightenment to empowerment. Banks should be saddled with the responsibilities of educating and empowering their customers with knowledge and skills needed to operate these alternative channels maximally. These can be done through the printing of clear, easy-to-understand and multi-lingual leaflets for the bank customers and the use of adverts in the print and electronic media. Customer service officers, operation teams, together with all other relevant staff who have one-on-one relationship with bank customers can be trained and retrained in the use of these alternative channels (internet banking, POS, mobile banking, ATMs etc) and in transferring this knowledge and skill to customers. Rural banks particularly have an uphill task. They must vigorously pursue a programme of enlightenment an empowerment to avoid a situation in which the rural customers become progressively disinterested in using bank services.

Necessity is said to be the mother of inventions. I have no doubt that Nigerians will surely catch up with the knowledge and ability required to operate these alternative channels, and thereby make the cashless policy a success. According to Pavan Valluri of Finacle Infosys Limited, “customers become more technology savvy … and their usage of alternate channels of banking is increasing”.

This is also true of Nigerians. Why won’t we become technology savvy? It is money (ego) we are talking about here.

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3 thoughts on “How inclined are Nigerians to Alternative Banking Channels (ABC)?

  • olodudesola


    Nice one, but maybe we have to run a check on the infrastructure we have on ground to the enhance smooth running of the cash-lite policy across Nigeria.

    • Niyi Omikunle

      I agree with you. I think the introduction should be gradual. I also do not think the government could have done better in terms of sensitizing the public. The literate masses would possibly have no challenge adjusting to this but I am not sure of how the less-educated masses would adjust.
      All the same, Nigerians seem to have the ability to easily adjust to changes. The benefit of this kind of policy far outweigh the cost which to me only has to do with convenience.

  • Israel Ekeyi


    Sure the cashlite policy is a great one,i would love to comment from the position of the banks;different electronic channels are being rolled out daily including Mobile banking,Internet banking, POS ,ATMs and even most recently we have machines to deposit both cash and cheques.But like someone said,the infrastructures are not working at their best,for instance we still battle with ATM non dispense issues where the customer has to wait several days for his/her money to be reversed,system downtime especially when transacting on line and some technical grey areas that need urgent attention.
    I would also advice that the processes of using this electronic media should be simplified to the barest minimum and make it user friendly to all.
    Gradually, we shall get there..

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