Apart from convenience, queues at Automated Teller Machines (ATMs) are quite disgusting and have led to increased patronage of agency banking by Nigerians. Particularly, this has given rise to significant increase in the number of banking agents operating in the country.
According to Shared Agent Network Expansion Facility (SANEF) and as published by the Central Bank of Nigeria (CBN), banking agents increased by 220 percent from 83,560 in December 2018 to 267,627 as at February 29, 2020. The 2020 roll out plan was expected to bring additional 232,373 agents to close out the year with the 500,000 agents.
BusinessDay spoke with some customers who gave reasons for patronising the agents instead of the banks, of which the major driver was convenience and the longer time they spend queuing at banks’ ATMs.
“I use the agents regularly. I am going to use them again tomorrow (Saturday). Three of the agents are 10 steps away from my house. They charge me N200 for N10,000, which is better than going to spend a lot of time at the ATM,” says Ima Obong, who lives in Ikotun-Egbe area of Lagos.
One of the customers at Okota area of Lagos says he patronises the bank agents because of convenience. “They are closer to me than the ATM machines. It is faster than going to the ATM machine that will eventually disappoint me. It is quite cheaper compared to the time I spend at the ATM machines,” he says.
At Command area of Iyana-Ipaja, Lagos, Olusola, a young lady who works in Apapa, says she patronises the banking agents because of the “too much queues at the ATMs. I use it because it is very fast.”
Igbokwe lives in Abule-Ado area of Lagos. He spends a minimum of N200 to get to the nearest bank for transactions. “The ATMs are usually crowded. I feel it is much easier for me to go to the banking agent closer to me to withdraw N10,000 and pay the same amount I would have spent to go to the bank,” he says.
The CBN, deposit money banks, Mobile Money Operators, and Super Agents on March 27, 2018, unveiled plans to roll-out a 500,000 shared agent network within two years, to deepen financial inclusion in the country.
The rising number of banking agents springing up across every street corner is seen as a good development for the economy, but monitoring and regulating them becomes a challenge, stakeholders say.
Financial Services Agents Survey 2020 report by EFInA notes that opportunity to make additional income is the major motivation for becoming an agent. Others are anticipated marketing activities from principals, increased footfall for pre-existing business and customer request.
The report shows that 69 percent of the agents are motivated by the need to make additional income; 29 percent said Principal/Aggregator sold the idea to them; 24 percent said agency banking services increase the number of customers that visit their business; 23 percent of the agents said customers asked for the service; 10 percent said they were motivated because others were doing it; 9 percent said family/friend asked them to start, and 5 percent saw it as an opportunity to be gainfully employed.
Agents mostly operate from business centres and kiosks. POS and smartphones are the most used delivery channels for running the business.
Nigeria’s central bank has moved the financial inclusion target from 80 percent in the year 2020 to 95 percent in 2024.
