ATM revolution: Removing the roadblocks
One of the features of Nigeria’s contemporary banking terrain that has impacted positively and significantly on banking culture is the availability, spread and use of Automated Teller Machines(ATMs).
Unlike the old culture of very long queues in banks just for the basic purpose of making cash witndrawals, customers now have a tempting and convenient choice of using these ATMs. The continued spread of these ATMs is highly desirable but it appears there are emerging roadblocks that pose threats to an ATM revolution in Nigeria.
Regulatory uncertainties occasioned by the reluctance of deposit money bank’s to step up investments in the deployment of Automated Teller Machines (ATMs) has seen penetration levels stagnate in recent times – a situation that does not bode well for Nigeria’s quest to achieve financial inclusiveness, according to industry analysts.
Statistics show that Nigerians move N80 billion monthly through the ATMs.
Even with the widespread usage and adoption of ATMs in Nigeria, Africa’s largest economy, the population of ATMs has been stuck at the 11,000 mark for the past six years, resulting in an average of 11.39 machines per 100,000 adults, according to latest industry findings. A World Bank report however shows that adults in the country account for about 56 percent (95.2million) of the total population (I67 million). In stark comparison, Indonesia, with an adult population of about 90 million, more than doubled their ATM installed base from 16, 700 in 2011 to 36, 500 in 2012, resulting in 37 ATMs per 100, 000 adult population, about three times the ATM per adult capita in Nigeria.
There has been a general lull in Nigeria’s ATM market, according to industry insiders. They say this is largely due to the Central Bank of Nigeria’s (CBN) misadventure with the Independent ATM Deployers (IAD) experiment of 2008 which barred financial institutions from deploying ATMs outside their branches.
This move, according to them, resulted in an abrupt halt in the momentum of ATM deployment by banks in the country. “From 2006, when ATM deployment started, penetration was growing year-on-year. After the policy changed, it stopped.
Analysts believe that frequent and un-strategic policy reversals impacts negatively on investor confidence.
As at the end of 2013, according to the CBN, there were about 11,000 ATMs in the country. As at 2011, there were 9,640 ATMs deployed across the country, whilst in December 2010, Nigeria recorded 9,958 ATMs.
BusinessDay Investigations reveal that Nigeria’s ATM population lags behind that of other countries. South Africa has 60 ATMs per 100, 000 adult population, while the United Kingdom (UK) has 124 ATMs per 100, 000 adult population. Nigeria clearly has a lot to do in terms of deployment, according to industry analysts, who pointed out that the current number of ATMs is grossly inadequate to meet Nigeria’s vision 20:20 target of being amongst the top 20 economies in the world by the year 2020.
A new report by Ernst & Young, a global business and financial advisory company, has however found that bank customers in Nigeria are the heaviest users of ATMs in the world.
In an age of technology, Nigeria should not go backwards in the deployment of technology in easing economic transactions. It is expected that the penetration of ATMs should have gone more deeper than it is now, even offering more robust platforms for multiple transactions.
Relevant authorities should do a rethink on ATM deployment towards increasing its penetration across Nigeria and thus providing a platform for better financial inclusiveness.