Banking
Nigerian Banks Resort to Electronic FX Payments as Cash Shortage Worsens
By Dipo Olowookere
The scarcity of foreign exchange (FX) in the financial system in Nigeria has forced commercial banks operating in the country to resort to payment of forex directly to the domiciliary accounts of customers or debit cards.
Business Post keenly observed that this is a new system the financial institutions are devising to manage the FX crisis the country is battling with at the moment.
Currently, it is very difficult for customers to get hard currencies in cash from banks for amounts more than $500.
At one of the banks visited by this reporter in the Egbeda area of Lagos State, customers were told to provide a domiciliary account of the bank for the requested forex to be transferred into.
In a situation where a customer is unable to provide one, a forex trader stationed in the bank is approached. After the exchange rate is agreed upon, the money is transferred into his account, and the Naira equivalent is given to the customer.
One of the customers who spoke with this newspaper said, “This is what this bank has been doing for a while now. They tell you there is no cash (FX). I have been coming here for weeks to get just $400, but it has not been successful.
“It was later suggested to me to provide a domiciliary account, which must be of the bank for the funds to be transferred. Since I do not have one, I had to use the Mallam’s account. We agreed on a rate, which is N7 lower than what is obtained outside, but I had no choice.
“When I asked him how he would get his forex in cash, he laughed. I know your guess is as good as mine. I hope this is another way these banks are milking us because I was asked to fill cash collected by me when in actual sense, I was not given the cash.”
Recently, Access Bank sent an email to its customers, informing them that FX payments would only be made via the Access Travel Debit Card.
“We would like to once again inform you that we disburse authorised personal and business travel allowance FX requests through our Access Travel Debit Card.
“The Access Travel Debit Card has been created to enable you to transact seamlessly when you travel abroad,” a part of the message sighted by Business Post read.
Another lender, First Bank, also sent a similar message to its customers when it said, “The full Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) ($4,000 and $5,000) respectively will now be disbursed into your First Bank Travel Card.”
A banker in the forex department of one of the old generation banks, who craved anonymity, told Business Post that the electronic FX payments to customers were obviously deployed to manage the shortage of cash in the system when efforts to ration the hard currencies failed.
A financial analyst based in Lagos, Mr Sunday Kalu, said this trend will continue until after the 2023 general elections.
“What we are witnessing at the moment is caused by the political actors. They have mopped up available FX in the financial system, and banks find it challenging to meet customers’ demands.
“The electronic forex transfer into customers’ accounts is another way to manage the crisis, and I support them. Don’t forget, the USD is not our legal tender, and there should not be any need for you to have the cash with you here except the Naira. So, I support this system,” Mr Kalu told Business Post.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
By Adedapo Adesanya
The International Finance Corporation (IFC) and Goldman Sachs have announced a new partnership with African banks, including Nigeria’s Zenith Bank and Stanbic IBTC Nigeria to support the Goldman Sachs 10,000 Women initiative, a joint programme launched in 2008 to provide access to capital and training for women entrepreneurs globally.
The two Nigerian banks are part of nine financial institutions from across Africa which have agreed to join the 10,000 Women initiative committing to leverage the business education and skills tools the programme provides to create more opportunities for women entrepreneurs across the continent by providing access to business education.
Others banks include Stanbic Bank Kenya, Ecobank Kenya, Ecobank Cote d’Ivoire, Equity Bank Group, Banco Millenium Atlantico – Angola, Baobab Group, and Orange Bank.
Speaking on this, Ms Charlotte Keenan, Managing Director at Goldman Sachs said – “10,000 Women has had a powerful impact to date, but we know that there are more women to reach and more potential to be realized.
“We are delighted to partner with IFC to supercharge the growth of women-owned businesses across Africa, and mainstream lending to female business leaders. We remain committed to supporting entrepreneurs with the access to education and capital that they need to scale.”
Since 2008, the 10,000 Women initiative has provided access to capital and business training to more than 200,000 women in 150 countries.
“This expanded initiative marks a significant step forward in creating equitable economic opportunities for women in Africa, enabling them to build stronger, more resilient businesses and to realize their entrepreneurial goals,” said Ms Nathalie Kouassi Akon, IFC’s Global Director for Gender and Economic Inclusion.
Goldman Sachs’ 10,000 Women initiative complements the Women Entrepreneurs Opportunity Facility (WEOF), launched in 2014 by Goldman Sachs and IFC as the first-of-its-kind global facility dedicated to expanding access to capital for women entrepreneurs in emerging markets.
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