When the Jonathan administration introduced the Bank Verification Number (BVN) on February 14, 2014, it was said to be a game changer in preventing financial fraud. Little did people, especially the rural dwellers, realise that lack of it could prevent people from being beneficiaries of government’s social interventions. JUSTINA ASISHANA reports
Despite the Niger State Government’s commitment to lift citizens of the state in terms of providing social intervention, a 50-year-old Munirat Hamisu, a petty trader in Tegina in Rafi Local Government Area of Niger State feels unhappy. Hamisu is not happy that she has not benefited from an ongoing social intervention programme launched by the state government.
The Niger State Community Action Recovery and Economic Stimulus (NG-CARES) Result Area 3 Platform programme launched in 2023 is under the state’s Small and Medium Enterprises (SME) Agency.
Its main purpose is to help micro; small and medium businesses grow and attain sustainability.
Managers of the programme, a World Bank-supported initiative, are now using digital platforms to distribute financial grants to the over 20,000 direct beneficiaries, with nearly ₦3 billion disbursed so far.
But for Hamisu to benefit, she needed to have a Bank Verification Number (BVN). “It is not as if I do not want to benefit from the programme as I know some people who have benefitted, and I know what N50, 000 would do for my business, I currently do not have a BVN because I do not have a bank account. I am seriously not inclined to do all these banking things as we do not have banks in this area unless you go to Kontagora or Minna. I prefer keeping my money with me,” she said.
Lawal Mukar, who charges phones and sells recharge cards in Mariga Local Government Area, is one of the beneficiaries of the programme. But, he recounted how challenging it was for him to open an account in order to benefit from the programme.
“The N50, 000 went a long way to help me. Imagine that I miss the opportunity just because I do not have a BVN and a bank account. I was able to buy another board with switches for my phone-charging business and buy recharge cards for sale. I now have enough capital and extra money to take care of my family,” he said.
In Nigeria, digital payments continue to grow at a rapid pace and are on track to replace cash as the norm for daily payments. In its bid to encourage people to get a national identifier, federal and state governments are now using digital payment systems to distribute funds and social benefits.
The benefits of the BVN
The Bank Verification Number was introduced in 2014 to curb financial fraud and improve accountability within the banking system.
The NG-CARES programme’s use of BVN as a unique identifier prevents duplicate payments and creates a digital footprint for beneficiaries. This digital identity infrastructure isn’t just about preventing fraud – it’s laying the groundwork for beneficiaries to access other financial services in the future.
“This requirement for a BVN is a double-edged sword,” Tunde Akande, a financial analyst said.
“On one hand, it ensures that funds go to legitimate beneficiaries. On the other, it excludes those who are most vulnerable—people the programme is supposed to help,” he added.
The Director-General of the Niger State Small, Medium and Microfinance Agency, Ahmed Shu’aibu Gwada, who spoke told The Nation that anyone who registers and does not input his or her BVN would not get the fund.
This requirement has created a natural pathway for informal business owners to enter the formal banking system.
“Honestly, if one registers and one ddidn’t have an account number, one can’t get funds. This is because the funds must be traced to you. Anybody that you see who has received this money applied and passed through that stage must have an account number.
“The reason for demanding the BVN is to ensure that there is no double-dipping. This means that one person cannot use two different accounts to get the benefit as one’s BVN is linked to all of one’s accounts.
“One person cannot get it twice, wherever you are in the state, as long as you have gotten it, you can’t get it twice. That is why the system makes use of the bank verification number. The moment you are deemed qualified, you’ve got the money; you cannot get it again.
“Every applicant must have an account number. If one doesn’t have one, as one applies, we encourage one to go and have one. It is because the payment must be made through one’s account so that it can be traced to one. There’s no form of table payment. Table payment is not encouraged in this system,” he said.
Digitising access to financial empowerment
Unlike the previous interventions that involved traditional methods that rely on manual applications, the NG-CARES programme is fully digitised.
The applicants are made to register online by providing detailed information about their businesses, which the system uses to categorise them into appropriate grant tiers. Amounts range from ₦50,000 to ₦600,000, depending on business size and operational needs.
The digital approach is not only more efficient but it also eliminates barriers such as favouritism and corruption.
“The system is open,” Gwada said. “You apply, move through the stages, and if you qualify, you are paid directly into your account.”
Gwada explains that the digital application system ensures fairness and accessibility, removing bottlenecks such as favouritism or corruption.
“It is a system that is open,” he said. “Applicants move from one stage to the next until they get to the final stage. This approach is not only transparent but also inclusive.
“People apply online, though we have been able to guide them through some of these business centres around. We have also tried enlightened owners of the business centres so that when people approach them to help them to register online; they can do it for them such that they will be able to pass through the different because there are different stages. “So, people apply online, and when they do, it is the information they supply during the registration that naturally takes one to the category of the amount of money one gets as a support.”
The programme’s backbone is a digital application system powered by the Bank of Industry (BOI), which serves as a technical partner and financial intermediary. This digital infrastructure marks a decisive shift from traditional table-payment systems that often breeds corruption and inefficiency.
Reaching the unbanked
Approximately 40 per cent of Nigerians remain unbanked, according to data from the World Bank. These are primarily rural dwellers, women, and low-income individuals who lack access to banking services due to distance, illiteracy, or distrust of financial institutions.
According to the MD/CEO of the Nigeria Inter-Bank Settlement System (NIBSS) Premier Owoh, 64 million people have enrolled for the BVN as of October last year.
However, the exclusion of unbanked individuals from the NG-CARES programme has become a source of concern for activists and development experts as they believe that several people in the rural areas who need it would not benefit because they are not banked.
“What we’re witnessing is systemic discrimination against the rural poor,” said Hafsat Ibrahim, a Social Policy Advocate.
“If the government wants to uplift these communities, it must address the root causes of financial exclusion instead of relying solely on cashless systems,” Ibrahim said.
For women in rural areas, the challenges are even more pronounced. Many are discouraged from opening bank accounts due to cultural norms or lack of identification documents. The disparity may widen the gender gap in access to financial and social support systems.
The SME agency states that it has set up community-level desk officers in local government secretariats and enlisted community representatives identified as ‘pointers’ to ensure that those in rural areas can access the programme while awareness is being created through media campaigns in Hausa, Nupe, and Gwari to further broaden outreach to non-English-speaking populations.
“We’ve consciously targeted cooperatives in rural areas, to ensure that every ward is represented in our statistics,” Gwada noted.
Beneficiaries without bank accounts are encouraged to open them, with the Bank of Industry acting as the technical partner for disbursements.
“The disbursement process involves partners such as BOI, which is our technical partner. The money is not with the SME agency. The monies are warehoused with the Bank of Industry. They are the ones that deploy the software that we are using for the application, for the processes, and even the disbursement. Ours is to monitor and ensure that things are moving fine.
“But, at the end of the day, we are the ones to finally give the approval that those who have scaled through can be paid based on the approval of the state government. So, the monies are paid by the Bank of Industry. One cannot get paid if one doesn’t follow the process of application, nomination, vetting, and all that. So, we don’t pay directly,” Gwada said.
Digital payments do not only enable transparency but also brings the unbanked into the financial system. This requirement ensures that funds are traceable and prevents duplicate applications, a problem that often plagues traditional programmes.
Experts argue that the government must find a middle ground to ensure transparency and inclusiveness. Solutions could include mobile money platforms, which allow individuals to access financial services without traditional bank accounts, or community-based registration centres to help rural dwellers obtain BVNs.
“There needs to be a deliberate effort to bridge the gap between the unbanked and financial systems,” said Akande. “The government should collaborate with financial institutions and civil society groups to develop solutions that are innovative and accessible.”
Fatima Abdullahi, a widow and mother of three, shared her frustration: “I don’t have a bank account because the nearest bank is two-hours drive away. Now, I can’t access the funds to buy seeds for the planting season. How will I feed my children?”, she queried.
This report is produced under the DPI Africa Journalism Fellowship Programme of the Media Foundation for West Africa and Co-Develop.
