MICROCAPITAL BRIEF: Microfinance Bank Customers Exempt from Nigeria’s Cash-Lite Cashless Banking System and Tax

The Central Bank of Nigeria (CBN) has exempted microfinance banks from participating in the Cash-Lite banking system in recognition of the challenges of training and persuading microfinance customers to use electronic and cashless banking services, such as automated teller machines (ATMs) and checks. As part of Cash-Lite, CBN has begun taxing withdrawals and deposits of over NGN 150,000 (USD 934) for individuals and NGN 1 million (USD 6,230) for businesses. The exemption allows microbank customers to make transactions above these limits without penalty. Implementation of the program began in Lagos in January and a nationwide rollout is planned.

By Natalie Baer, Research Associate

About the Central Bank of Nigeria (CBN): The Central Bank of Nigeria (CBN) was established in 1958 as Nigeria’s central banking authority. As defined by the Act of Parliament that created CBN, its statutory mandates are as follows: “to issue legal tender currency; to maintain external reserves; to safeguard the international value of the legal tender currency; to promote monetary stability and a sound financial system in Nigeria; and to act as banker and financial adviser to the Federal Government.” As of July 2011, CBN reports total assets of NGN 8.37 trillion (the equivalent of USD 54 billion).

Sources and Additional Resources:

[1] CBN exempts microfinance banks,
http://www.thenationonlineng.net/2011/index.php/business/money/35232-cbn-exempts-microfinance-banks.html

MicroCapital.org story, January 22, 2012, MICROCAPITAL BRIEF: To Promote Electronic Payments, Central Bank of Nigeria Taxing Cash Transactions, https://www.microcapital.org/microcapital-brief-to-promote-electronic-payments-central-bank-of-nigeria-taxing-cash-transactions/

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/