• Tuesday, July 16, 2024
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Bureaucracy vs banking the unbanked: Can Nigeria find a middle ground for PoS operators?

Bureaucracy vs banking the unbanked: Can Nigeria find a middle ground for PoS operators?

Many Nigerians breathed a sigh of relief when the Corporate Affairs Commission (CAC) announced a two-month extension for Point-of-Sale (PoS) operator registration. The initial July 7th deadline had caused a stir, particularly among microbusinesses in remote areas struggling with the registration process. While the Central Bank of Nigeria’s (CBN) desire to formalise and regulate this vital sector is understandable, the initial time frame threatened the very livelihood of many PoS operators, who play a critical role in bridging the financial gap for millions. This extension offers a welcome opportunity to ensure this regulation strengthens, rather than hinders, financial inclusion across the nation. We must ensure this move strengthens, rather than stifles, financial inclusion across Nigeria.

PoS operators have become the backbone of Nigeria’s financial ecosystem, especially in underserved communities. Their role in bridging the gap between the unbanked population and formal financial institutions is undeniable. Statistics showcasing the exponential growth in PoS transactions paint a clear picture of their increasing importance.

However, the current registration requirement, with its tight deadline and stringent nature, threatens the very sustainability of these essential service providers. The financial burden of registration fees, legal costs, and necessary documentation can be crippling for many PoS operators who function on razor-thin margins. The spectre of closure looms large if they are forced to divert limited resources towards compliance.

Furthermore, the September 5 deadline is simply unrealistic given the bureaucratic complexities that plague Nigeria’s business landscape. This compressed timeframe heaps undue stress on operators already juggling daily operations. The resulting scramble to meet the deadline could inflate costs and disrupt operations, ultimately harming both the operators’ livelihoods and the communities that rely on them.

“Their role in bridging the gap between the unbanked population and formal financial institutions is undeniable.”

To navigate these challenges and ensure a sustainable future for PoS operators, a collaborative approach is paramount. The government and financial institutions must explore the possibility of establishing a financial assistance programme specifically designed to help PoS operators defray registration costs. Grants, subsidised loans, or fee waivers could provide a much-needed buffer, allowing operators to achieve compliance without jeopardising their financial stability.

A reasonable extension of the registration deadline is also essential. Granting operators an additional 12 to 24 months would provide them with the necessary breathing room to plan and budget effectively. This would alleviate the financial pressure and the associated rush to comply.

Read also: CAC begins registration of PoS operators

Clear and accessible communication is another critical piece of the puzzle. The CBN and CAC must collaborate on robust awareness campaigns to educate PoS operators about the registration requirements and processes. Utilising a multi-pronged approach that leverages social media, community engagements, and local media outlets would ensure widespread dissemination of accurate information. Establishing dedicated support centres or helplines would provide an invaluable resource for operators navigating the registration process.

Simplifying the registration process itself holds immense potential. Streamlining documentation requirements and eliminating unnecessary bureaucratic hurdles would make compliance more achievable for microbusinesses. User-friendly online registration portals with clear step-by-step instructions would significantly reduce the perceived complexity for these operators.

Finally, fostering partnerships with local organisations and NGOs can yield significant benefits. These collaborations can provide crucial resources, training programmes, and logistical support, empowering PoS operators to meet regulatory requirements effectively.

The CBN’s directive undoubtedly stems from a desire to strengthen and regulate the PoS sector. However, achieving these goals requires a nuanced approach that acknowledges the challenges faced by microbusinesses. By prioritising sustainable solutions that support compliance without compromising operator viability, we can ensure the continued growth and success of this vital sector. A thriving PoS network is essential for advancing financial inclusion and propelling Nigeria towards a future of economic stability. Here’s how we can achieve this:

Foster collaboration: The CBN, CAC, and financial institutions can work together to establish a support system for PoS operators. This could include financial assistance programmes, training workshops, and streamlined online registration portals.

Invest in digital infrastructure: Expanding internet access and improving network connectivity, especially in remote areas, will empower PoS operators to register and access necessary online resources.

Promote financial literacy: Educational campaigns can equip PoS operators with the knowledge and skills to navigate the financial system effectively.

Embrace innovation: Exploring alternative registration models, such as leveraging existing databases or mobile phone verification, could further reduce administrative burdens.

On the whole, implementing these measures implies that we can create a regulatory environment that fosters a secure and thriving PoS ecosystem. This, in turn, will empower millions of Nigerians across the country to participate in the formal financial sector, propelling economic growth and shared prosperity.