Moneygram Halts Relationship With New Banks
Stories by Ayodele Aminu and Olugbuyiro Akinola
MoneyGram - one of the international money transfer companies in Nigeria has put on hold further relationship with any bank in Nigeria following the recent directive of the Central Bank of Nigeria (CBN) on N25 billion minimum capital base for banks.
A representative of MoneyGram, Mr. Habib Ndao made this known yesterday at the agreement renewal signing ceremony with the United Bank for Africa Plc in Lagos.
He listed the conditions required for relationship with banks which would have to apply after the consolidation exercise to include: liquidity, network, integrity, capacity, efficiency and on-line services.
He also disclosed that the sister global funds transfer agency -Western Union Money Transfer has been barred by the Central Bank of South Africa.
Ndao stated that the three principal sources of funds transfer to Nigeria are Britain, South Africa and United States of America.
He however expressed satisfaction and confidence in UBA's service delivery, saying it offers the biggest money transfer service in Africa.
Earlier, Executive Director, Retail Banking Group, UBA Alhaji Bello Garba, explained that the agreement between the two organisations had to be renewed because the earlier agreement of seven year-term expires tomorrow.
Specifically, he maintained that "the objective of the agreement is to partner MoneyGram in the business of money transfer for the benefit of Nigerians residing abroad to meet domestic obligations as well as cultivate savings habit that would ultimately be beneficial to the investment profile of the Nigerian economy."
While chronicling the developments so far, Garba recalled that when MoneyGram began in 1997, the beneficiaries were paid in local currency.
However, in December 2001, the Central Bank of Nigeria gave a directive that all banks rendering International Money Transfer services must commence payment in dollars to the beneficiaries.
The UBA's Director noted that the CBN's order threw up a challenge to all the banks involved in the International Money Transfer business to source for dollars, which most of the beneficiaries opted for.
He stressed that the renewal of the agreement is a reflection of UBA's commitment to the money transfer service requirement of the bank's customers and the confidence the bank has in MoneyGram.
UBA, he stressed, has recorded a steady growth in the volume of transaction which grew from US$36.73 million in 2001/2002 to US$45.96 million in 2002/2003, and further to US$50.96 million in 2003/2004.
Garba further disclosed that the bank has recorded US$16.42 million in the first quarter of the current year.
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