CBN’s tech strategy for ‘Anchor Borrowers’, cleaner notes

As part of efforts to improve the operational efficiency of the Anchor Borrower’s Programme (ABP), the Central Bank of Nigeria (CBN) has introduced technology to guide input distribution of farmers under it Anchor Borrowers Programme. The pilot phase, flagged off at the Federal Capital Territory (FCT), last week, was meant to build a national data base for small holder farmers, enhance efficiency of input distribution and eliminate ghost farmers.

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, while speaking at the flag off ceremony for this year’s farming season, said the biometric information of the farmers had been taken, their farms mapped and biometric cards produced for each farmer, which would identify them while collecting the inputs from the service providers.

His Special Adviser on Agriculture, Olatunde Akande, who represented him at the event re-emphasised that service providers had already mapped all the farmlands to be used for this season in order to avoid false claims by the participating farmers.He noted that the FCT farmers would be used to try the technological innovation introduced into the ABP, adding that the process will spread across 24 states that are participating under the Rice Farmers Association Nigeria (RIFAN)- ABP dry season.

The governor later flagged off the input distribution exercise with 10 farmers from Abaji, Bwari and Kuje Area Council, using their biometric cards, as a test run to what can be accomplished by effective technology.The inputs distributed included water pump, NPK fertilizer, organic fertilizer, urea fertilizer and herbicide. The service providers also presented tractors that would be used for ploughing and harrowing. All these inputs form part of the total loan due to the farmer, thereby eliminating the old way of disbursing cash directly to the farmers.

Note that the strategy is not just about reducing cash transactions, but as already acknowledged globally, digital innovations are fast enthroning a regime of transparency and accountability, as well as reaching the expected target.The representative of the Managing Director of the Bank of Agriculture, Emmanuel Ameh, urged the farmers to make judicious use of the inputs, as a way of reciprocating the efforts of CBN.

The President, RIFAN, Alhaji Aminu Goronyo, thanked Emefiele for his leadership and commitment to ensuring that Nigerian farmers are empowered to contribute to economic development and urged all RIFAN members to take advantage of this opportunity as it marks a new beginning for funding small holder farmers in Nigeria.

The input distribution anchored by the trio of the CBN, BOA, and RIFAN would continue throughout the week in the North Central states of Niger, Kogi, Nassarawa and Benue. Other zones will commence in succession, according to the roll out plan.

Similarly, the complaints about dirty and unfit notes in circulation are not new, because at a certain point in the banking industry operations, the over-the-counter and Automated Teller Machines’ transactions expectedly, became the outlet for dirty notes that were mixed with new notes.Two bulk tellers from two banks told The Guardian that they have the discretion to sort out dirty notes and even reject them when customers come with them, because “if you collect unfit note, it would be debited against you,” yet these financial institutions were one of the disbursers of the near unfit currencies in circulation.

According to Wiki, “currency changes hands constantly” and one never knows where the money in ones’ possession has been, particularly banknotes, which has the tendency to build up grime and may be loaded with bacteria. Notes collect dirt and discoloration from the germs that rub off of people’s hands. Of course, not minding how careful one is, our own local unit- Naira, can easily be put to unfit condition.

Still, a report by The Atlantic, while discussing the causes of notes’ mutilation, noted: “You might have noticed that it’s pretty hard to find any cash printed much earlier than the 1990s in circulation. Just as more money is constantly being created, it’s also constantly being destroyed. Who are the destroyers of money, and how do they do it?”

Of course, this is about the nation’s local currency (naira notes) being physically destroyed or put out of crisper condition. But how? For example, majority of Nigeria’s auto parts dealers, market women and teeming Okada riders (on aggregate level) are leading the pack. This is mostly fueled by literacy level and lack of confidence in the alternatives (technology) as most transactions are cash-based. Sometimes, you make withdrawal to pay them, only for them to go back and remit the same money in their accounts.

While the argument that Nigeria has gone far in the adoption and use of technology, perhaps by the level of literacy, particularly by the market women and traders in major enterprise hubs, cutting edge solutions are now being developed and made available in the country.For the past five years, CBN, under its longstanding Financial System Strategy 2020, has pioneered several initiatives aimed at reversing the trend that has eaten deep into government coffers- cost of replacing unfit notes. The most notable of these initiatives is the cash-less project, which at present, has cut across sectors of the economy.

In the banking sector particularly, the move has strengthened innovations leading to speedy clearing of cheques. Besides the Internet banking, mobile banking (use of phones in full banking transactions) has been advanced. Still, for many who cannot afford “smart phones” for the full mobile banking, now have alternative in the technology embedded in Unstructured Supplementary Service Data (USSD), also known as Quick Codes.

These are aimed at reducing dependence on cash, saving the available notes and cutting down on the budget associated with replacement of unfit notes in circulation.Besides, these offer Convenience, as they can be executed at the comfort of the home or elsewhere and any time, thus eliminating the barriers of closed operations during holidays and weekend. This is the benefit of going digital and aligning with the CBN’s strategy. Of course, this will bring end to queues at ATM points.

In fact, the Chief Executive Officer of Outlook Asia Capital, once told Economic Times that these technological innovations track spending. That is the second benefit. It also helps to pay the exact amount of bills, saving the challenges of looking for change or forfeiting it to shopkeepers who nowadays will always tell their customers that there is no change.

While the campaign to embrace the technological innovations ongoing in the financial system, it is incumbent on all to give it a trial. There can be no end to dirty currencies in the system as long as financial transactions are involved and people continue to patronise vendors of various goods and services. But there can always be reduction in the level of unfit notes in circulation. The secret is patronizing the alternative solution- the digital payment system, which encompases Point of Sales and electronic transfers.