How government can ride on COVID-19 to increase BVN enrolment

By Rarzack Olaegbe

The coronavirus pandemic is still here. It has come to destroy, to disrupt and to distribute opportunities. To seize some of these opportunities, you need to understand that things would no longer be done as usual. You see, seizing opportunities is not, will not and cannot be easy. Besides, the opportunity is not canned like sardines. To seize an opportunity and turn it into gold, you need some work, some heavy lifting and sweat. That is what the Central Bank of Nigeria [CBN] needs to do to tap into the opportunity shore up by the pandemic.

If the CBN would achieve its target of increasing the financial inclusion rate by 95 per cent in Nigeria by 2024, as it has projected, the apex bank should wrap its arms around this present opportunity. Doing so would assist the CBN to harmonise data in the banking system. For a start, this pandemic has lured the majority of Nigerians into the arms of online transactions. Many Nigerians are using the ATM-like never before. They conduct transactions on mobile apps like never before. They are embracing online funds transfer and PoS for personal and corporate needs. This affirmation was attested to by the management of First Bank recently when it announced that N1.8 trillion transactions occurred on the bank’s online platforms.

This further shows that more Nigerians have been wooed by the cashless policy and that they are using electronic payment platforms en masse.  So, for the CBN to increase the Bank Verification Number [BVN] enrolment, the federal and state governments have a good opportunity to identify eligible Nigerians for social benefit, and the payment should be routed to these Nigerians through electronic platforms. Other Nigerians who also qualified but are not enrolled should be captured as a prerequisite to access the social stimulus. This would have achieved two clear objectives. The social benefit disbursement would be transparent and can be traced. More Nigerians would have been enrolled onto the BVN platform and cases of impersonation or cloning eradicated.

Besides, biometric enrolment would suite the unbanked segment that cannot read or write. They would only require fingerprints and pictures. The BVN will increase access to loans.  It will help credit providers to reduce situations of defaulters who go from one bank to another to get a fresh loan without the latter bank knowing their credit history. This will assist the CBN to achieve its objective of linking more than 100 million accounts by 2025. It is also an opportunity for financial inclusion growth.

However, as more Nigerians understand that the social benefit payment, food distribution and agriculture grants are tied to BVN enrolment there will be willingness and openness to enrol and the figures will increase. Already due to the COVID-19, media reports have suggested that agent banking activities have also been impacted in significant ways. Many Nigerians have adopted agent banking. The reason is clear. It has a human face: You and I trust the mom and pop shops in our street corners. You can strike an easy conversation with an agent. It is biology. Agents are humans. The pressure for cash is still on the rise. In a similar vein, the CBN can increase the number of BVN enrolments via the agent banking by empowering the army of agents to open an account and enrol customers in addition to accepting bills payment at agent locations.

According to the Deputy Director, Payment System Management of the CBN, Musa Jimoh, who mentioned at a media function last year that the apex bank is committed to increasing the number of BVN enrolments, these are some of the unusual ways the CBN can achieve its objectives. Another unusual way, which has been pushed out before and which deserves reechoing, is to collaborate with the telecoms, fintech and other stakeholders in order to attract about 150 million Nigerians into the financial system and its numerous offerings. This method guarantees success for the CBN.

However, information gleaned from Nigeria Inter-Bank Settlement System (NIBSS) indicated that about 40 million active bank accounts are already linked to the BVN.  Good job. Though, it is not enough. The regulator can achieve more. But it is encouraging that the CBN is thinking in this direction already when it launched the BVN Premium and BVN Lite last year. Bank customers under the premium tier are to supply 18 basic requirements for a complete BVN enrolment while customers in the lite level require minimal documentation.

The BVN is CBN’s initiative. It is still the best-centralised verification system in Nigeria’s data harmonization history. The unique identification number uses biometric technology to register customers. It acts as a universal identity enabling easy identification across the financial services industry. The exercise has been on since 2014. Some millions of bank accounts are still not linked to the BVN. What this means is that interoperability in the banking sector will remain a dream.

This is why the bank still requires you to fill forms, provide utility bills, identification means each time you need to open another account. With the BVN, the CBN has a database of bank customers. The database ensures that banks and individuals are protected from fraud as suspicious transactions can easily be identified and reported. But the inability to link all bank accounts means that these fraud incidences go unchecked. Data harmonization is a continuous process because banks and other financial institutions have to open new accounts daily.

Populationpyramid.net suggested that Nigeria’s population would hit 233 million by 2025. This implies that with technological advancement, more than 150 million Nigerians would have bank accounts. The World Bank report also attests that over 40 million Nigerians who do not visit the ATMs or carry out online transactions and e-commerce will be financially included with the BVN enrolment. COVID-19 has provided an opportunity to increase the number of BVN enrolment. CBN should seize this opportunity.

Olaegbe, Executive Director – eMaginations