Microfinance banks see government policy hampering financial inclusion

Groaning under the impact of the recently introduced N50 stamp duty on transactions above N1,000 by the Federal Government, microfinance banks operating in the country have described this as anti-financial inclusion.

The Federal Government through the Central Bank of Nigeria (CBN) had last month ordered deposit money banks and other financial institutions to begin the charging of N50 per eligible transaction in accordance with the provisions of the Stamp Duties Act and the Federal Government Financial Regulations 2009.

This, Valentine Whensu, president, National Association of Microfinance Banks (NAMB) said is affecting microfinance banks because MFBs through the deposit money bank correspondent give out loans to customers beyond the reach of their office location through group methodology.

“This is greatly anti-financial inclusion and we are crying out that the government should come to our aid in MfBs. Our members are actually crying”, he told BusinessDay in an interview.

He was concerned that charging N50 stamp duty on micro savers in addition to N1/mille account maintenance fee by deposit money banks will discourage savings habit and may lead to under-pillow savings among the grassroots.

“One suffers over N1,000 transaction because customers go directly to pay N1,000 they are expected to pay every week as loan repayment and they are charged N50. It is the MFBs that are suffering it. Are you now saying we should debit the customers in our various banks? If we do that, it means N1,000 repayment has turned to N950 and they will not be willing to continue, but to keep their money in the pillow”, Whensu said.

“ It is wrong in a country that says it wants to increase employment, improve people financially and now it says it wants to generate N2.5 billion in an economy that is very fragile”, he said further.

The CBN noted in circular to all banks and other financial institutions that the charges are payable by receiving accounts.

According to the Apex bank, each deposit money bank shall open an account designated as NIPOST stamp duties account into which all charges collected shall be paid.

The balances in such accounts shall be transferred monthly by banks to CBN NIPOST stamp duty collection account number, while other financial institutions shall remit their stamp duty collections to any deposit money bank of their choice.

The CBN enjoined banks and other financial institutions to support government’s revenue generation drive through compliance with the provisions of the Stamp Duties Act, LFN 2004 as reinforced by the court judgment in Suit No FHC/L/CS/1710/2013.

HOPE MOSES-ASHIKE