Cashless policy will address corruption in the banking sector- Akowe

Mr. Akowe Isaac Idris is the Chairman, National Association of Micro-finance Banks Edo State Chapter and MD/CEO, Auchi Microfinance Bank Limited. A professional accountant, financial consultant and an administrator of great repute whose knack for excellence and avowed commitment to a better society sets him apart. The banker speaks on Buhari’s anti-corruption policy, impact of microfinance banks on the economy and other sundry issues. Moshood Karim reports

How would you rate the impact of Auchi Microfinace Bank on the economic life of Afemai people?

Well, so far since past eight years I have been the Director of this bank, I have seen lives been transformed through our credit facilities to the grassroot people by providing financial support for their businesses. I want to say, so far so good we have had quite a number of people from the community who through our credit facilities have improve their lives especially women. We have so many of them here who come in groups to access loans- say N50,000; N100,000 and above and from time to time we give advice on how to grow their business.So far I think we have made positive impact in the lives of the people

How do you manage return on investment?

This is a major challenge for Micro-finance banks. We give out loans to empower the people and you discover that this people refuse to come back and pay the loan. But then, through our other financial services, we make profit then plough back the profit and declare others as dividend to the shareholders.

What is the contribution of Micro-finance banks in helping government solve the unemployment problem in the country?

I want to put it in two ways. Number one, from time to time we receive students who are seeking a place for Industrial Training. We provide a place for them here. We receive not less than ten every year. Apart from that, we also employ over 50 staff that are currently working here and not just working, we give them appropriate training to further equip them for higher responsibilities and we have seen some of them move to higher levels. Some to other micro-finance banks where they are made to occupy higher positions and immediately they leave, we make arrangement to fill the vacant space.

The other aspect as to do with our small scale customers, we have empowered so many people in this community to the level that so many of them have been able to open several branches of their business and employed more staff. We have also empowered a number of artisans through purchase of equipment and machines to expand their trades. Looking back now, there is no year we have not disbursed less than N500 million in form of loans to empower the people.

On cashless policy

As the Chairman of the National Association of Micro-finance Banks, Edo State Chapter, this is one of the issues we are seriously working on to see that we join the commercial banks to implement the cashless policy. For instance, at our bank here, you can transfer any amount of cash to any banks- say Zenith, UBA. You can even do the transaction on your phone. We have these facilities. All we have to do is to give you password (token), so you can move money from your account to another. The other one, we are working on is the inward transfer from other banks. That is the only area left. Of course, we have the ATM. Anywhere you go within the country; you can withdraw your money from there. So when you talk of cashless policy, we are already there.

Money laundering 
We assist the government to tackle money laundering by submitting to relevant authorities, information on deposits by private individuals and co-operate entities as required by law.
Challenges of Micro-finance Banks
One of the major problems of micro-finance bank is the cost of operation. The cost of operation is very high. If government could address some of these infrastructural problems, I think it will go a long way to help. For instance, if electricity became stable, I will pay less on power cost. Another challenge that we face is the issue of pay back. That is, customers coming to take loan without paying back. So the issue of “trust” is a serious problem here, because we are supposed to lend without collateral. But we are now forced to lend with collateral because of this problem. Most people when they take, they don’t pay back. The government set up the Asset Management Corporation of Nigeria for the bigger banks to absorb their bad debts. So, there is need for a special court to be put in place to look at all these micro-finance bad debts and not just going to the court- year after year. Come today, come tomorrow. I mean once there is a court and within three months any case on default on loan or whatever is resolved. I think any customer coming for the loan will realize that, as I am coming for the loan, I am expected to pay back at a specific time and if I am not able to pay back the court will pick up the case where everything will be settled.Buhari’s anti-corruption policy
 I think am one of those who support the anti-corruption war. I remember in 1984, when our president was the Head of State. There was this War Against Indiscipline (WAI). Then, when you have rough piece of paper in your hand that you wish to dump, you will first of all look around whether there is any government official watching you. I believe, if that government had stayed, things would have improved and fell in line. But unfortunately, reverse is the case.Now coming back to the issue of banks helping corrupt officials to loot the treasury, we thank God for what the CBN is bringing into the system- the cashless policy. Before, these people used “Ghana-Must-Go” bags to move money here and there; you cannot ascertain the amount of money being moved. But now there is a limit to the amount of money you can move by cash.Another step the CBN has taken is the issuance of “Bank Verification Number” with this; you can assess all the accounts of the person involved. You can also trace the movement of money from one account to the other. I think this move by the authority is a good measure to curb corruption in the industry. This is because, there is now a way you can trace movement of money from bank to bank. To a large extent the cashless policy could curb corruption in the system.