The proposal by the Minister of Finance, Mrs. Kemi Adeosun, for microfinance banks to adopt the Bank Verification Number policy have received knocks from economic and financial analysts.
The experts insisted that the strength of the microfinance banks cannot cater for the BVN process.
An economic analyst, Dr. Alaba Olusemore, explained that the innovation is a welcome development, since the Federal Government was successful with the implementation in the banking sector, he, however, argued that it is not certain whether the MFBs have the technological capacity to handle and achieve the desired result.
“Many of them lack basic infrastructure, as they have the challenges of poor management and human resource and conventional internal operational processes, among others.
Adding BVN issue to it might frustrate them out of business,” he said. Olusemore stated that since all microfinance bank account holders have accounts with correspondent banks, which are the commercial banks, “recommending the BVN for MFBs will pose huge challenge for them in terms of financial outlay to acquire the technology for BNV.”
“Cheques issued by microfinance banks are called managers’ cheques, because they don’t go through clearing, so making them use BVN for transactions like the conventional banks, I am not sure it is cheap, but very expensive for them to acquire,” he added.
The fellow of the Chartered Institute of Bankers of Nigeria added that rather than ordering the microfinance banks to use the BVN, government can start with the national microfinance banks first, and leave out the smaller microfinance banks that are community based.
Another economic analyst, the Deputy National Coordinator, Institute of Chartered Economists of Nigeria, Dr. Oladipo Ganiyu, attested to the fact that although BVN helps in curbing corruption or fraudulent practices of various bank account holders, recommending it for microfinance banks needs a rethink by the government.
He said, “You cannot compare the strength of microfinance banks with that of commercial banks, looking at their capital base, which cannot be compared side by side, as well as their technological capacities.
There are only few of them that are functioning in Nigeria, because a lot of them find it difficult to even access customers’ account, not to talk of using the BVN to track customers’ transactions on their accounts.
“It is going to create a serious problem and by so doing, many people will abandon the banks, because it would be very difficult for customers to get their money. There is no way you can embezzle huge amount of money and put it in a microfinance bank, it is not done anywhere, you rather place it in commercial banks.”
