The proliferation of mini-banks

A walk through my neighbourhood here in FESTAC Town, Lagos, reveals a large number of mini-banks that have recently been set up along the streets, and in one corner or the other, of the neighbourhood. I believe that this is also currently the situation in many other parts of the country. Many umbrellas and kiosks have been set up in one corner of the street or the other, offering banking services, which would otherwise have been offered at the different bank branches.

This reminds me of the days when GSM (Global System of Mobile) Communications services were newly introduced into Nigeria. Many kiosks and mini-shops became involved in offering GSM services, including making phone calls, selling of recharge cards, etc.

With the newly introduced mini-banks, services range from cash transfers, cash withdrawal, cash deposit, Point of Sale (POS) services, etc. However, one thing that I have observed about the new mini-banks’ services is that they are quite expensive. For instance, just a few days ago, I attempted to withdraw Seven Thousand Naira (N7,000) using one of these mini-banks. On getting to the mini-bank, I was told that I would be charged Three Hundred Naira (N300), for withdrawing N7,000. I felt that this charge was too much, compared to the current Thirty-Five (Naira) charge (and even the hitherto Sixty-Five Naira (N65) charge) placed on the fourth and subsequent withdrawals made in a month, from an Automated Teller Machine (ATM) not belonging to your bank, and the NO CHARGE for withdrawals made using your bank’s ATMs. I therefore bargained for a N200 charge, but the mini-bank attendant refused.

I would have used an ATM to make a withdrawal on that day, but at the several ATM centres of the four different banks along 23 Road in Festac Town where I had attempted making the withdrawal earlier, there were only a few of the ATMs dispensing cash, and there was a very large crowd waiting to use the ATMs. So, I opted for the mini-banks, as I needed the money urgently to purchase some prescribed medications.

The reason I have chosen to write about my experience with these mini-banks is that I feel that their charges are quite high. For example, at the mini-bank where I was able to withdraw Seven Thousand Naira (N7,000) at a charge of Three Hundred Naira (N300), one of the people standing by even said that I was fortunate to be charged N300 for withdrawing N7,000. He told me of another instance where someone was charged a whopping One Thousand Naira (N1,000!) for withdrawing Ten Thousand Naira (N10,000)! This probably took place during the #EndSARS protests, when there was a curfew, and many businesses were closed.

So, I would like to use this medium to make some suggestions regarding the operations of these recently introduced mini-banks:

First: I would recommend a reduction in the charges for transactions made through these mini-banks, especially with regard to cash withdrawals. I think that the current charges are quite on the high side.

Second: Although the banks might claim that introducing and setting up mini-bank outlets is to help ease the stress encountered by their customers, such as spending hours either at the ATM or in the banking hall, before they are eventually able to successfully complete their transactions, this setting up of mini-banks should, in my opinion, serve as only an alternative of last resort, especially for the few whose circumstances would not allow then to visit their bank branches to perform their transactions. It should not be an excuse for the banks and their branches not to load their ATMs with sufficient volumes of cash regularly. I emphasize this because I have already observed that since the introduction of these mini-banks and their services, the ATMs of some banks have not been stocked regularly with cash, as they used to be previously, thereby forcing the bank customers to take the rather expensive alternative of patronising these mini-banks.

The banks should still maintain their previous culture of regularly loading their Automated Teller Machines (ATMs) with sufficient volumes of cash, especially during periods of crises, when there is a need for people to access cash urgently. The banks should not reduce the amount and frequency of loading cash on their ATMs, just because of the existence of these newly introduced mini-banks.

This kind of situation reminds me of one very interesting and entertaining sitcom/comedy programme which I usually enjoy. The comedy is known simply as “COSBY,” and the title of the particular episode I am referring to here is: “NATURAL BORN DEBTORS.” It is a video (uploaded by one ‘Rami Radi’) which you can currently find and download on YouTube. In this interesting, approximately 20-minute episode of COSBY, Hilton Lucas (Cosby) visits his bank in order to make an over-the-counter withdrawal for a somewhat urgent expense he needs to make. But on his arrival at the banking hall, the Teller informs him that his bank has recently merged with another bank, and that the newly merged bank was currently experiencing some technical difficulties, and all their computers were down.

So, he (Hilton Lucas) cannot make a withdrawal over-the-counter. Hilton Lucas pleads with the Teller to give him some special consideration, considering the other documents he has in his possession to prove his identity, but she still cannot help him. Later, the bank manager advises him to use the ATM, which is located somewhere just outside the banking hall, but Mr Lucas (Cosby) does not want to be charged Two Dollars ($2) for making a withdrawal through the ATM. He is however forced to do so later, because of the prevailing circumstances at the banking hall. You can download and enjoy more of this video at your leisure.

So, the point I am trying to make by citing the above-mentioned video as an example, is that not everybody is comfortable with the idea of being charged a high/expensive amount, or even any amount at all (which most times comes from the individual’s hard-earned savings), especially for withdrawing cash from their bank accounts.

The concerned authorities should kindly take note and consider implementing a reduction in the charges made by these newly-introduced mini-banks. Thank you.