1. Banks came in to help in circulating our currencies. They provided an avenue for people to assess and store their monies. But because they are banks, a lot of people who have not had formal education saw them as places for the ‘krachies’.
2. Then the savings and loans institutions came to bridge the gap to encourage the informal sector to have a means of saving their money as well as avenues to borrow money to invest in their businesses. They also mop-up the excess liquidity in the system.
3. And then investment banks came to provide avenues for individuals who have excess money and wish to invest to do so.
4. So in effect, these sectors survive only based on the confidence and trust that the people have in them that they can keep their monies and be able to have access to those monies when they need them.
5. Then mobile money or electronic transfers through the use of the phone, came to make access to money and movement of same easier and simpler.
6. Unfortunately, instead of continuing to encourage more people to utilise the electronic means, government has rather taken steps to impose a levy that would discourage many from using the platform.
7. In addition, many of the savings and loans companies were closed down in a manner that caused panic which means that automatically, those in the informal sector who were already skeptical about the formal banks, have been touched and in so doing, heightening their fears about banking.
8. And then the main banks have also been affected by closing some in a manner that equally affected the capital of those in the formal sector who deposited in them.
9. And then further at the investment side, people who thought they had income they could invest, have been touched with their hard-earned monies being treated as though government was the one that gave them the monies to invest. These have serious ramifications on the confidence of the people in these financial institutions for a very long time to come.
10. Currently, it’s not easy to convince anyone that investing in a bank and for that matter bonds is the right thing to do. There’s no way you can assure people that even their deposits in a bank are safer than before. There’s no way to convince the market woman that saving in a savings and loans company is without the risk as compared to storing the money under her pillow. In addition, it’s getting difficult to encourage people to use electronic means of transfer in order to reduce risk when in some cases, their cost of transport in delivering the money is not even 10% of the charges to be paid.