Some microfinance banks are not happy with a recent suggestion that they should migrate to the National Microfinance Bank Unified Information Technology (NAMBUIT) platform for their operations.
Joshua Etopidiok, Director, Special Insured Institutions Department of the Nigeria Deposit Insurance Corporation, (NDIC), made the suggestion during a workshop for the Finance Correspondents Association of Nigeria, (FICAN), on Tuesday in Lagos.
Etopidiok, in his lecture to FICAN members, noted that there are 911 Microfinance banks and 34 Primary Mortgage Banks, PMB’s, currently operating in the country and that being on the NAMBUIT platform would ensure better service delivery to MFB customers.
He said that MFB’s who refused to get on the NAMBUIT platform risk losing their customers.
“CBN and NDIC bankrolled the development of NAMBUIT to address the cost of operations and assist MFB’s to upscale in order to increase financial inclusion.
“Discussion and collaboration with Interswitch to provide solutions for CARDS on POS and ATM’s, eWallets and instant transfers is being perfected.”
Speaking to Elendu Reports on the condition of anonymity, some MFB operators kicked expressed concern about the suggestion.
In a text message exchange with our reporter, one Microfinance bank managing director said: “NAMBUIT is a core banking application built to support MFB’s that do not have resources to onboard technology in the subsector. This was the idea behind NAMBUIT. CBN now expects all the 911 MFBs in Nigeria to come on board NAMBUIT and we said this is not possible for a number of reasons.
1. Most banks have superior technology and have signed a service agreement for 10 years with their Core Banking Application providers with upfront fees of over N60 to N80 million. How can these banks recoup the money or is CBN going to refund?
2 putting all the MFB’s into one software pose a serious risk factor to the subsector because any breakdown in the network will result in total service interruption and complete shutdown of all MFB’s in the country to the detriment of our customers.
3.INLACS computers who are the service provider is unable to give enough technical support to those MFB’s that have currently onboarded NAMBUIT and cannot guarantee to be able to provide quick support to the 911 MFB’s when put together because of the size factor.
4. The action of bringing all under one bucket does not give room for competition as very soon INLAC will begin to exhibit monopolistic behaviour of price control.
5. Technology is dynamic and banks who will stand the test of time are those who embrace technological innovations and any time a single MFB wants innovation in their software, they may not be able to do so unless you have to disrupt the entire system. So technological advancement which ought to give competitive advantage is disrupted.
6. The cost of onboarding and charges are not disclosed to date which sends dangerous signals of undue and spurious charges that may come later when we are all locked in by which time it will be too late.
7. CBN’s action does not promote a healthy regulation as we believe that local indigenous technology should also be made to compete as that can lead to service efficiency and could impact the GDP positively.
8. INLAC is an Indian firm and registered in CAC Nigeria and we do not understand why the CBN governor will stoop so low to begin to source for businesses for them as regulators by forcing all the MFB’s to onboard NAMBUIT against all other banking application available in Nigeria.
9. We expect NAMBUIT to be optional and if they prove to be the best then by natural laws people will volunteer to onboard based on performance and efficiency.”
