Regulators, banks, others move to ease banking barriers for non-profits

By Udeme Akpan

Nigerian regulators, banks, and civil society groups have intensified efforts aimed at easing stringent banking restrictions on non-profit organisations (NPOs).

These concerns were expressed at the just-concluded multi-stakeholder working group convened by Spaces for Change, which brought together financial institutions, regulators, and non-profit representatives to address regulatory bottlenecks in Lagos.

According to the non-profits, their biggest challenge is access to the financial system, particularly difficulties in opening and operating bank accounts due to strict compliance requirements.

Speaking at the event, Victoria Ibezim-Ohaeri, Executive Director of Spaces for Change, said banks are reluctant to adjust without explicit directives from regulators.

She said: “Banks say they know the law has changed, but the Central Bank has not directed them to enforce it. We are the ones facing the consequences of that gap.”

“Previously, many banks categorised NPOs as high-risk entities. That is now beginning to change,” Ibezim-Ohaeri added, noting that training programmes are being conducted for financial institutions across the country.

Similarly, Pattison Boleigha, Managing Director of Pattison Consulting Limited, said: “One of the major challenges is the inability of NPOs to open and operate bank accounts, in some cases hindering their ability to deliver essential humanitarian services.”

Boleigha noted that many banks wrongly classify all non-profits as high-risk entities. “Financial institutions should not treat all non-profit organisations as high-risk,” he said.

Also speaking, Bawo Egbakumeh, Registrar/Chief Executive of the Compliance Institute Nigeria, said improved engagement is bringing clarity.

“There is now greater clarity on how NGOs operate and how they should be onboarded within the financial system,” he said.

Confidence Obayuwana of the Nigeria INGO Forum added: “The needs continue to increase, and the government alone cannot meet them. This is where non-profit organisations play a critical role.”

He further noted that private sector support should be seen as a strategic investment. “When you contribute to reducing poverty, it expands market opportunities for private sector players,” he said.

The experts examined several issues, including the need for a uniform onboarding process across banks to standardise documentation and reduce compliance burdens, especially for smaller organisations.