POS (point of sale) business owners operating in Kano State, located in the North-West region of Nigeria, are currently grappling with a severe shortage of cash, particularly in rural areas.
Daily News 24 reports that the scarcity of funds has led to significant difficulties and posed a considerable dilemma for these entrepreneurs.
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Cash Crunch Situation in Kano
The scarcity of cash in Kano has become a critical issue for POS business owners, hindering their day-to-day operations.
These business owners are currently facing challenges due to the unavailability of cash for conducting their transactions.
Background and Central Bank Policies
In March 2023, the Central Bank of Nigeria (CBN) announced that the banknotes issued before the redesign remained legal tender until December 31, adhering to the Supreme Court’s order.
Last October, the former CBN governor, Godwin Emefiele, disclosed plans to redesign the N200, N500, and N1,000 notes, urging citizens to exchange their old notes before January 31, 2023, as they would cease to be legal tender after that date.
However, this move created a nationwide cash crunch in February, leaving citizens stranded and leading to protests and bank attacks in various Nigerian cities.
Kano’s Cash Scarcity Predicament
Even though the Supreme Court extended the legal tender status of previous banknotes until December 31, rural areas in Kano are still grappling with severe cash scarcity, with about two months remaining until the deadline.
Ahmad Musa, a POS business owner from Bunkure Local Government, shared his concerns with Daily News 24, highlighting the impact of cash shortages on his business.
He mentioned the challenges faced in obtaining cash from banks, which have restricted their cash distribution to business owners.
“We do face a lot of challenges. No cash now. We hardly get it now. Banks don’t give us cash anymore. We only get it from business owners.” Ahmad narrated.
“We beg them for it. Some give it to us while others charge us for it.” He added.
Struggles and Alternatives
Ahmad further revealed that the business owners have been forced to approach other local establishments to acquire cash, but this often entails either obtaining it as a favor or incurring additional charges.
This inconvenience significantly affects the operations of POS centers, impacting their ability to serve customers effectively.
Our correspondent noticed that, due to the scarcity of cash in both POS centers and banks, a growing number of individuals are resorting to online transactions.
ATM Limitations and Emerging Solutions
Visiting various ATMs and PoS venues in the city, it became apparent that cash scarcity has resulted in limited access to funds, with many machines unable to dispense cash.
The affected institutions have imposed withdrawal limits for customers who can still access cash, compounding the challenges faced by both businesses and individuals.
Alternative means, such as digital transactions, have become increasingly popular as a way to overcome the cash crunch.