Bank charges: More families return to thrift savings
CHIGOZIE AMADI
As the economy bites hard on the average Nigerian family, the recently increased bank charges may have become one too many for them and, naturally, in this kind of situation, the alternative becomes the choice, and that appears exactly what many families have decided to do.
In trying hard to meet up and manage the continuous increase in the general cost of living, many families have reduced the volume of their savings in the bank.
And the banks’ decision to increase charges of both deposits and withdrawals finally broke the camel’s back.
Therefore, many families have stopped saving in the banks. Instead, they have moved back to the familiar terrains, which they probably must have abandoned many decades ago.
Economy&Lifestyle found out that the few who save are not willing to save their money formally but have returned to the informal local thrift contribution method abandoned for years.
In the 90’s, daily contributions popularly known as ‘ajo’ a Yoruba word, gained prominence and acceptance by many especially small business owners.
This served as a means of self employment for individuals who have the ability to move around and collect money from customers willing to save. A little amount is paid as service fee for the period the contribution lasts.
The increased exposure to financial literacy and inclusion made many to adopt formal methods of saving such as banks and wallets.
Mrs. Celestine Ogbebor, a trader noted that, she embraced ‘ajo’ because of the recent charges deducted from her bank account anytime she deposits money.
“It’s not funny anymore. Imagine saving N50,000 and when it gets to your account you have nothing less than N49,000 left. You are unable to use the money for the thing you budgeted it for.
“If you have a target of N200,000 a month, you will be getting less than the amount.
“So, I returned to doing my daily contribution to those local thrift collectors and collect my money with just N200 instead of losing more than that because you pay when you deposit in banks and when you withdraw also.”
Mr. Francis Ighiadolor, a mechanic, said: “I make daily contributions locally now to save for whatever I want.
“Since a close friend’s bank account was hacked and his N2 million disappeared into thin air till date, I resolved to make a daily contribution.
“We organized it among ourselves as a group of mechanics.
“Even the way the bank charges you for their services doesn’t encourage me to do banking anymore.
“Even the wallets are not safe. Money just disappears into thin air and you are left with nothing because the banks will always tell you it is not from their side.
“Since I started this contribution, I attend to my needs on time and have received no excuses about my money disappearing.”
The shift from ajo to formal saving methods was as a result of situations where collectors abscond with customers’ savings or are being robbed, making customers dejected and some unable to recover from such loss.
Another reason was the trust in the financial system of formal financial institutions then.
Mrs. Miracle Ajani, a hairdresser, said she created a WhatsApp group where members communicate with the administrators.
“This enables them to have the trust and know whose turn it is to receive payment and it is done in cash.
“They bring their contribution to my shop.
“Some of them have stopped using their bank accounts to save money.
“Even when money is sent to them they withdraw it immediately complaining that deductions are constantly made from the account and reduce the value of the amount sent.
“When I collect the money, I give it to the person whose turn it is to receive and remove N100 for the service fee which they prefer.
“I also do daily contributions with those local thrift collectors because I don’t have the time to visit the bank daily and at the end they deduct from the little I had saved all in the name of charges.
“They always have explanations to give. So to avoid such, I resorted to saving with local thrift collectors.
“Recently, I heard that they increased ATM withdrawal charges and SMS alerts.
“In this economy. I don’t have money to waste all in the name of saving.
“All those high end traders are also saving with local thrift collectors which they collect at the end of a period to restock.”
Recall that commercial banks on May 1st increased their SMS alert charges to N6 from N4 citing increased telecommunication tariff.
