Stepping on toes

Experts explain gains of cashless policy at FirstCentral’s webinar

In the recent webinar organised by FirstCentral Credit Bureau – Experts from financial sector, mostly Fintechs, MFBs, Commercial Bank and Central Bank of Nigeria scrutinised the pros and cons of the cashless policy.

FirstCentral Credit Bureau Limited, Nigeria’s only independent and first licensed Credit Bureau , well-known for its commitment to designing and deploying solutions that turn data into strategic tools for information and risk management, recently organised a webinar titled: ‘Harnessing the Benefits of Cashless Policy on Credit Allocation in a Developing Nation’ which had Experts from financial and fintech institutions throw their weight behind the cashless policies of the Central Bank of Nigeria, (CBN), highlighting the benefits of improved credit allocation on the country’s economy.

The Managing Director, FirstCentral Credit Bureau, Mr Deji Peters in his welcome address asked participants to look forward to unlearning and relearning while focusing on the gains that the policy may bring from the experts who have come to speak at the webinar The Central Bank of Nigeria, (CBN), highlighting the benefits on credit allocation on the country’s economy during a webinar put together by FirstCentral Credit Bureau Limited titled: ‘Harnessing the Benefits of Cashless Policy on Credit Allocation in a Developing Nation’ stated that the benefits of the cashless economy would to a large extent reduce money laundry, reduce government revenue leakages and improve financial inclusion, amongst others. Haruna Bala Mustapha, Director, banking supervision department, CBN said the cashless policy is aimed at reducing and not eliminating the use of cash and encouraging the use of electronic channels for payment transactions in Nigeria.

Mustapha who was represented by Adeniji Adekunle said the cashless policy which was introduced since 2012 in Lagos was later extended to five other States and FCT in 2013. He said the policy has since been reviewed and updated. He listed the impact of a cashless economy to include improved efficiency in payments, increased cost savings and improved transparency and accountability. Other benefits he mentioned are improvement in risk management and financial inclusion. Also speaking during the webinar, Ade Bajomo, president FintechNGR said one of the most significant impacts of the cashless economy is its impact on credit allocation whether it is SMEs, organisations, institutions, governments or individuals.

Bajomo hinted that the current credit supply is not sufficient to address the needs of SMEs and therefore going cashless will avail institutions the financial records of SMEs, their sales and purchases amongst others to enable them make informed decisions. He mentioned economies that have succeeded and benefited from cashless policies to include Sweden, Norway, South Korea and the United Kingdom, adding that these countries also tackled challenges in their way to success. He said Nigeria is also facing similar challenges which include infrastructure challenges, security, data bridges and resistance to change amongst others in its way to achieving a cashless economy.

“Transiting to a cashless society requires a lot of education but it is rewarding when successful. Emerging technologies such as block chain technologies have potential to transform the sector,” the FintechNGR president said. Ikemefula Nwachukwu, head, personal banking, First Bank of Nigeria, said challenges of digital lending in commercial banks include data security, regulatory compliance, integration with legacy systems and cost of acquiring digital solutions. Nwachukwu however noted that commercial banks can leverage digital lending by engaging in customer profiling and credit advisory. During his presentation on ‘Microfinance Banks Embracing Cashless Policy as a Tool for Financial Inclusion,’ Joshua Ukute, National President of National Association of Microfinance Banks in Nigeria said 38 million adults are financially excluded and 81 percent (30.8million) among them live in the rural area, while 19 percent (7.3million) live in urban areas. Ukute said 61 percent of the 38 million adults own phones and 24 percent use phones owned by others. He said among the 38 million adults, 25 percent are saving but 75 percent are not saving. He said there is an opportunity to tap into the 38 million adult market and provide services for them.

FirstCentral offers a wide range of products regarding Financial Reporting, Data Integration and Financial Intelligence; they include reports like: Dud Cheque, Detailed Credit, Basic Credit, X-Score and others. Services like: Trainings on Credit & Financial Literacy, Directorship Credit Reporting, Data Analytics are also being offered.
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