An instruction from a host on the eve of the journey to Ibilo, a trading hub in Akoko Edo, in Edo State read: “Please come along with cash. There are no banks here!”
Building of closed UBA branch.
The mission to this agribusiness centre on the border of Okene in Kogi State and Ondo State was to source material for the ‘Business Unusual’ page that features uncommon enterprises.
There is no bank in sight in this beehive of trade in garri, yam, egusi, and several other farm produce as well as finished products.
A branch of UBA in Ibilo was closed about four years ago after two robbery incidents. Now, residents travel about 50 kilometres to Okene or farther to Ondo State to get bank services.
The residents face the harsh reality of financial exclusion, raising questions over a cashless campaign on which the Central Bank of Nigeria (CBN) has spent huge resources.
Each market day leaves residents and visiting traders with their hearts in their mouths over how to evacuate proceeds of business transactions. From the South East, Abuja, and the rest of the North, traders converge on the market at the heart of the town.
Many come to buy, some to sell. They all face the challenge of travelling long distances with cash in an era of cashless transaction and when the CBN is beating the drum of financial inclusion.
The plight in Ibilo illustrates the poor penetration of banking services beyond metropolitan cities.
Investigation by the TheNiche across communities in Imo State reveal the near collapse of rural banking.
Banks scarcely exist outside Owerri, the capital. Residents in areas such as Ohaji, Egbema, Oguta and Agwa travel long distances with cash.
Except in Orlu, Okigwe, Mbaise and other towns, residents have grown used to living without banks.
In Anambra, banking operations begin and end at the major cities of Onitsha, Awka, Nnewi, and some towns with strong commercial activities.
Ben Olajina, who represented Akoko-Edo constituency in the Edo State House of Assembly between 1999 and 2003, said it is painful having to live without banks.
He lamented that a town which hosts a Federal Government College, a general hospital, and one of the biggest markets in Edo North Council – comprising Auchi, Igara, Ikakon and Onwa – has no single bank.
“People carry on a lot of businesses here and undertake the risk of carrying raw cash. People go as far as Okene, Kogi State, Auchi, Isako, and Ondo State to do their bank transactions.
“I am surprised that banks that ought to cite their branches here and make money are not forthcoming even after we have sent proposals to them. It is good business for any bank to cite its branch here,” Olajina said.
An elder in Uzeh quarters in Ibilo, Longe Ibukun, gave an assurance that the residents will volunteer to team up with the police to guard any bank located in the community.
Said he: “We want to see that there is a bank here in Ibilo, whether old generation or first generation. I know how useful UBA was to traders coming from the South East, Kaduna, and other parts of the country.
“They paid their money into this bank and when they got here, cashed it to do their trading on the market day. We all know that it is not safe for people to travel long distances with cash.
“The bank was serving not only Ibilo but also the villages around here, including Lampese, Imoga, Epesa, Ekuma, and Ikerun Oke.
“There are many large villages around here which are going to depend on the bank for transactions. The same way we are concerned is how other communities around us are concerned.
“The banks are saying there is no security here. But we have also promised that if any bank comes here, we the members of this community, will volunteer to safeguard the bank.
“We were leaving everything about security to the police but we have since realised that the police are not efficient enough when it comes to security.
“In the last robbery operation at the bank, robbers had a field day. After their operation, they walked away because their vehicle broke down and they abandoned it. There were no policemen to go after them.”
While banks are running away from rural areas because of insecurity, real or imagined, the CBN is insisting on July 1, 2014 as the deadline for the full implementation of its cashless policy.
Acting CBN Governor Sarah Alade said the deadline remains unchanged. But the CBN clarifies that cashless transaction is not to eliminate the amount of physical cash in the economy; it is to encourage more electronic-based transaction.
From July 1, the CBN will charge processing fees on cash withdrawal and deposits of over N500,000 on an individual account, and over N3 million on corporate account done within 24 hours.
Three per cent processing fee will be charged on cash withdrawal exceeding N500,000 and 2 per cent on lodgement exceeding the amount on individual account. For a corporate account, 5 per cent will be charged on withdrawal exceeding N3 million, and 2 per cent on lodgement exceeding that amount.
The scheme got off the ground in Lagos State in April 2012 before it was extended to Abia, Anambra, Kano, Ogun, Rivers and Abuja. It will now cover all the states.
Third party withdrawal over the counter exceeding N150,000 was disallowed last year to encourage more electronic-based transaction.
The CBN has also introduced agency banking and mobile telephone banking that require some degree of education and sophistication.
But only Sterling Bank has launched agency banking at two locations in Lagos – Gbagada timber market and Yaba fish market.