* Bank customers wait in line due to social distancing
* Pandemic has increased use of digital banking
* But poor internet connectivity an issue
By Alexis Akwagyiram and Chijioke Ohuocha
LAGOS/ABUJA, Sept 22 (Reuters) - Civil servant Amos Dam is
frustrated after waiting two hours to enter a bank in Nigeria's
capital Abuja. He is one of about 20 people sitting on plastic
chairs under a canopy to protect them from the sun on a pavement
between a busy road and the bank.
"It has become much more tedious trying to carry out any
transactions in the bank," said Dam, referring to the impact of
social distancing measures reducing numbers inside branches to
halt the spread of the new coronavirus.
The pandemic has increased the use of digital banking
services in Nigeria where restrictions on the amount of dollars
that can be withdrawn have also contributed to long waiting
times since some people require multiple trips to get foreign
currency.
A new breed of digital banks, without physical branches, say
they have had a boost due to the pandemic.
Kuda Bank, a digital only bank launched in August 2019 with
500 customers, said it tripled its daily adoption of customers
in a trend that began during lockdown in Nigeria's main cities -
Lagos and Abuja - from late March until early May.
The bank's chief executive officer Babs Ogundeyi said it had
taken on around 3,000 customers a day from April, compared with
just under 1,000 a day before.
POOR INTERNET CONNECTIVITY
"We expect the growth to remain," said Ogundeyi, adding the
pandemic forced many to overcome concerns about the safety of
online transactions in a culture where a fear of financial
internet scams has made people wary of abandoning cash.
Uzoma Dozie, CEO of Sparkle, a digital bank launched in June
2019, said the digital only business model was more
cost-effective.
"Seeing the impact of COVID and the fact that we might see a
second wave or other pandemics tells us that we need to build
resilience into our businesses, and that means being digital,"
he said.
He said, however, the lenders collaborated with "bricks and
mortar" banks for the use of cash machines.
Nigeria's traditional banks have also seen an increase in
digital transactions.
Local bank Fidelity FIDELIT.LG said 87% of transactions in
the second quarter of this year were made on its digital
platforms, compared with 82% in the whole of 2019.
Guaranty Trust Bank GUARANT.LG said the number of people
making payments using codes sent via text message rose between
December and June from 6.1 million to 6.7 million.
Peter Mushangwe, a banking analyst at ratings agency
Moody's, said Nigerian banks were "pursuing digitalization quite
vigorously" in a bid to attract more deposits to increase the
proportion of their income from fees as income from interest
makes up around 70% of their total income.
Outside the bank in Abuja, breathing in traffic fumes, Dam
said he was there because an electronic cash dispenser failed to
provide cash but his account had been debited.
He said he preferred using banking apps but that wasn't
stress-free due to poor internet connectivity.
"When the bank network is bad ... one transaction could take
you the whole day," he said.
(additional reporting by Abraham Achirga in Abuja; Writing by
Alexis Akwagyiram; Editing by Janet Lawrence)