Smarter Banking Rules: Key to Securing Lifesaving Aid for Millions of Nigerians – CIN Boss
By Omoyeni Ojeifo
To protect the millions of vulnerable Nigerians who rely on humanitarian aid and healthcare, financial institutions must transition to more targeted risk-assessment methods for non-profit organizations (NPOs), Registrar of the Compliance Institute of Nigeria (CIN), Bawo Egbakhumeh, has said.
Egbakhumeh said banks should assess NPOs based on their individual risk profiles instead of treating the sector as posing the same level of terrorism financing risk.
Persecondnews correspondent at the event quotes Egbakhumeh as speaking at the pre-conference masterclass for the 3rd Africa High-Level Civil Society Conference on Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT), organised by Spaces for Change (S4C) in Abuja on Tuesday.
He noted that the current approach has resulted in delayed donor funding, prolonged transaction reviews, account restrictions and other compliance hurdles that make it difficult for legitimate humanitarian organisations to deliver life-saving services, particularly in conflict-affected communities.
“Financial institutions should move from sector to entity and transaction-level risk assessment. We should identify only the subset of NPOs exposed to terrorism financing risks and not treat the civil society sector as a single high-risk category,” he said.
Egbakhumeh explained that many humanitarian organisations operate in areas where banking services are limited, forcing them to rely on cash transactions while receiving donor funds from overseas, factors that should not automatically place every organisation in the same risk category.
“The reality is that not all NPOs are bad. Their absence is costly because they complement government and the private sector in delivering essential, sometimes life-saving, support.”
The compliance expert admitted that the broad classification of the sector in Nigeria’s 2016 National Risk Assessment contributed to how many financial institutions viewed legitimate non-profit organisations.
“I was part of that assessment, and I confess I was one of those who viewed NPOs as high-risk. But evidence does not support treating the entire sector that way.”
According to him, available evidence shows relatively few registered non-profit organisations have been linked to terrorism financing, making broad restrictions disproportionate to the actual risks.
“It’s not the presence of NPOs in the financial system that threatens integrity. It is when you force them out of the financial system that integrity is threatened,” he added.
He said excluding legitimate organisations from the formal financial system could push them towards cash transactions and informal financial channels, making it harder to monitor financial flows and potentially increasing the risks anti-money laundering measures seek to prevent.
“Compliance should be proportionate to the level of risk. Financial inclusion is essential because NPOs must be able to bank safely, receive donor funds transparently and deliver services to those who need them most.”
Egbakhumeh called on regulators, banks, and civil society to work closer together, boost transparency, and refine risk assessments so that anti-money laundering rules don’t accidentally block vital humanitarian aid.