Internal Security Challenges and Microfinance
Sustainability in Nigeria
Ebele Sabina Erics1,
Martin Onwudinjo Ugada2, Catherine Amoge Eneh3
1Department of
Banking and Finance, Caritas University, Enugu.
2Department of
Public Administration, Caritas University, Enugu.
3Accountancy
Department, Caritas University, Enugu.
ABSTRACT
This
paper examines internal security challenges and microfinance sustainability in
Nigeria. Nigeria’s internal security threats
are among the most multifaceted and persistent in Africa, affecting every
geo-political region, educational center, religion, businesses, and creating
unimaginable negative consequences for national stability and development. The safety
of lives and property still remains the basic responsibility of the government
and the symbol for the existence of important economic sectors like agriculture,
education, business, health, social, and the entire nation. This paper made use
of secondary data and offered a comprehensive discussion on national and
internal security challenges, the threats to internal security and the
insecurity environment of microfinance in Nigeria. After due theoretical analysis of collected
data, the findings revealed that Nigeria has experienced series of internal
insecurity threats in form of destruction and relocation of properties and
businesses, which poses threats to the sustainability of microfinance
institution in the operations and continued provision of financial services in
Nigeria. The paper recommends that the government should: adopt more stringent
penalties for violent crimes such as kidnapping, Boko Haram groups, ritualists,
organ harvester to serve as deterrent to youths that may wish to engage in such
crimes; tackle the generational causes of internal security in the country such
as poverty, unemployment, corruption and ethno-religious crisis; assist cattle
farmer to establish ranches across the country to prevent farmers/Fulani - herdsmen
crisis and strengthen the general security architecture in Nigeria especially
in the northern part of the country to protect teachers and school children
from attack and abduction.
Keywords: Internal
security, National security, Microfinance, Sustainability
1. Introduction
On a daily basis, the insecurity situation worsens,
not only in Nigeria but worldwide. It is not surprising that globally, most
news headlines focus on internal security threats and how to save lives and
properties. Nigeria has witnessed an unprecedented level of insecurity over two
decades. It was thought that the return to democracy from military regime in
1999 would bring some level of political stability and security. Rather, from
one democratic dispensation to another, there is always one form of post-election
violence or some bitter power tussle, political thuggery, coupled with vehement
conflict and criminality, armed-robbery, rapes, kidnapping, oil pipeline
wreckage occasioned by Niger Delta militancy, human and drug trafficking, arms
smuggling, trans-border crimes, Islamic sect terrorists' activities such as
Boko Haram and Fulani herdsmen attacks. This has become a major national
security threat for the government, resulting in huge allocation of the
national budget to security. This disturbing dimension of insecurity and its
hindrance to the continued existence and sustainability of corporations in Nigeria
aroused interest in this area of research.
The ceaseless mischief caused by these unwholesome
groups of people, coupled with the security challenges faced by the country as
a result of their despicable activities, have certainly undermined the
country's national security and its international image, characterizing Nigeria
as insecure. The internal security situations in Nigeria have badly affected
her image and status as a main contributor to peacekeeping operations in the
African continent and internationally. Hence, the strengths of the country have
been weakened by countless security challenges bedevilling her in recent years
(Ahmed, 2022). Given these unhealthy insecurity scenarios, the sustainability
of microfinance and other businesses in the country is delusional.
The multifaceted role of microfinance has far-reaching
benefits beyond enhancing overall economic growth, especially in developing
economies. Microfinance institutions play an important role in improving the
standard of living of the populace through the use of their financial services
to alleviate poverty, improve gender equality and economic empowerment by
minimizing the unique challenges women face in accessing financial resources,
starting and growing businesses, and participating fully in the economy, enabling
people of lower social class to be financially inclusive via the provision of
soft loans, micro-savings, money transfer, insurance, micro-leasing and payment
services. According to Mou (2023), for improved socio-economic terrain and the
entrepreneurial needs of the nation, there must be an effective and
result-oriented internal security architecture.
Microfinance sustainability depends on how well the
government tackles security challenges that impede the operations, success and
survival of micro institutions that assist individuals get access to credit and
engage in business activities. The level of criminal activities in a country
are the major yardstick by which internal security could be measured. Nigeria
has employed quite a number of security outfits such as the Nigeria Police
Force, Nigeria Prisons Services, State Peace Corps, Nigeria Security and Civil
Defense Corps, Federal Road Safety Corps, Nigeria Immigration Services, Nigeria
Custom Services, Nigeria Fire Services, and other registered private security
organizations to ensure safety of lives and properties, yet the level of
insecurity and criminality increases daily at an alarming rate (Bodunde,
Adegboyega, & Afolabi, 2014). Despite the concerted efforts that have so
far been made in tackling the security threats and challenges, the security
problems are still very much with us (Mou, 2023). Given these security
challenges in the country, the continued provision of these services and
operations by microfinance may be a mirage due to the persistent insecurity in
the country.
Based on these, this paper examines the disturbing
dimensions of insecurity and microfinance sustainability in Nigeria. It offers
a comprehensive discussion of national and internal security challenges,
contemporary threats to internal security and the insecurity environment of
microfinance in Nigeria.
2. Conceptual Structures
2.1 Concept of Security
The word 'security' is an important and very essential
concept to the existence of individuals and the survival of any country,
organization, man and animals; hence the paramount responsibility of the
government to ensure security of lives and properties.
Security has to do with being holistically free from
any kind of threat to people and their beliefs. Going by this, alleviation of
threats does not ensure security since there is still an element of insecurity.
Aluta (2021) refers to insecurity as the state of fear or anxiety, stemming
from a concrete or alleged lack of protection. The 'human security' paradigm
proposed by Dr. Mahud ul Haq in the 1994 United Nations Human Development
Report assessed security in the light of the emerging global security exigencies
and challenges in various ways which includes: being secure and free from fear
of physical and psychological exploitation, persecution, health and good job;
nations ability to counter threats to its core values and benefits; being free
from danger or threat in the daily activities of human endeavor without fear of
injury to the body, violation of human right, or destruction of properties.
According to Ogunleye et al. (2024), the manner at which internal security is
managed in Nigeria is a threat to human rights and thus, constitutes insecurity
as it accounts for most human rights violations in Nigeria.
These assessments are in consonance with perspectives
in limited studies on security challenges in a country. Ahmed (2022) sees
security as a situation when an individual, group or the public can move freely
to carry out their daily activities without fear of danger, injury or
destruction of properties. Olanrewaju, Folarin, and Folarin (2017), as cited in
Zabadi (1998), assert that the security view associated with the survival of
the state and the preservation of its citizens is one in which individuals or
things are free from dangers of physical or moral aggression, accident, theft
or decline. Bodunde, Adegboyega and Afolabi (2014) see security as alleviation,
assuaging any kind of threat to man and his esteemed values. They affirm that
security is about freedom from threat and capability of state and the public to
uphold independent identity and their functional integrity against forces of
change, which they see as hostile, while the utmost aim is survival. Yusuf
(2022) opines that high rate of poverty is one of the factors responsible for
rising level of insecurity in the country.
Buzan in his book, People, States and Fear,
affirms that the concept of security was 'too narrowly founded'. He opines that
the concept of security is not power nor peace, but something in between
(2007). In an attempt to fill the gap, he offered an extensive concept of
security by identifying triple security-based levels and sectors analysis,
which deal with security from different perspectives: the individuals, the
states and international system, while the sectors are political, military,
economic, societal, environmental. In the first, which is human or individual
system depends on life, shelter, wealth, life, health, status, wealth, freedom,
danger, attack, destruction and other threats to man. The second is the state
security, where the main referent object is the state national security concept.
According to Buzan, the institutional, physical or ecological nature of the
state is taken into consideration in order to understand the security issues of
a large entity like the nation. It concerns issues like global warming, means
to resources and climate change (Stone, 2009). Buzan assumes that the
international security, which is the third dimension, is an anarchy
characterized with power politics, competition and conflict. International
security according to him is a study more than a study of threats, but that
which threat can be endured which needs immediate attention (Buzan, 2000). It
emphasizes on nation's control over the use of force as in the military and
policing components of security, proliferation of weapons of mass destruction,
terrorism, human trafficking, narcotics of firearms, human inequality and
COVID-19.
The security sector analysis examines how individual
and states can be free from threat in an environment with unavoidable linkages
across economic, societal, military, political and environmental settings.
Emphasis is on the interactions, susceptibilities, implications of
overstressing any of them, and the existence of contradictions in and among
ideas about security. Buzan stressed that different sectors of security is a
web of linkage that cannot operate in isolation. According to him, all the
sectors are equally important within the security line, hence any of the five
sectors can affect each other based on changes in the one prioritized. These
concepts cannot address the issue of security on its own, all the dimensions of
security need to be addressed in order to provide just and sustainable global
security (Buzan, 2007).
2.2 Internal Security
Internal security refers to the actions taken to keep
a country safe from harmful undertakings that come from within. Such harmful
doings could be conflict between a government and a non-governmental party or
community-based groups, conflicts occurring within states rather than between
them, as well as the involvement of non-state armed players within them.
Internal security could also be described as the protection of a country's
borders and people from threats that originate within the country which includes
maintenance of law and order, defending against crime, upholding the country's
sovereignty, preventing and responding to acts of terrorism, undercover
activities, sabotage, and other forms of rebellious activities. The presence of
any form of insecurity in a country constitutes threats to lives and property,
hinders business activities and overall economic development of a nation due to
the threats it will have on the investors, both local and foreign.
There are varieties of internal security threats such
as public disorder, violence or armed insurgency and which may be towards the
state, structures of the state itself or its amenities, and may range from
vandalism, crimes, industrial unrest, kidnapping, assassination or any form of
terrorism including state, dissident, religious or even domestic terrorism.
International terrorism in form of foreign powers is also a threat to internal
security through espionage, economic manipulation, sponsoring terrorism and
interference in political processes. Olanrewaju, Folarin and Folarin (2017)
state that the activities of civilian-in-arms against the Nigerian State, which
comes in the form of radical religious and regional youths such as Bakassi
Boys, Movement for the Actualisation of the Sovereign State of Biafra (MASSOB),
Boko Haram, Movement for the Emancipation of the Niger Delta (MEND), among
others, constitutes internal security. This weakens a nation's dominance,
compromises its ability to make independent decisions, and possibly leads to
instability and conflict without really declaring war. However, a country's
internal security measures such as stringent border control and immigration
policies, aimed at averting the entry of persons capable of posing a threat to
national security; surveillance of potential threats by monitoring the
activities of individuals or groups suspected of any terrorist attacks;
intelligence gathering analysis and counterterrorism operations by law
enforcement agencies to demolish terrorist networks through investigations and
arrests are aspects of country's national security and helps to protect the
citizens from harm.
2.3 National Security
The central pillar of a country's national security is
the preservation of the safety of its citizens and the protection of the
sovereignty of the country as well as the integrity of her state (Yusufu &
Umoru, 2022). National security threat has been a major issue for the
government as a result of the high level of insecurity in Nigeria, which has
been so alarming in recent times. This has resulted in huge allocation of the
national budget to security in order to curb the national security menace. Had
there not been security threats, funds would have been channeled to other
public sectors to improve the standard of living of the people.
Security threats involve not only other nation-states
perceived as conventional enemies but also non-state actors such as violent
non-state actors, cyber attackers, transitional corporations, drug cartels,
external aggression, and non-governmental establishments; some include natural
disasters such as droughts, floods, wildfires and events causing severe
environmental damage. Hofmann (2020) affirms that conflicts in which one or
more of the main actors are not part of the state demonstrate the limitations
of engagement in a national security system.
However, national security is the all-encompassing
concept of protecting an entire country, including its citizens, economy and
state sovereignty and institutions, from internal and external threats by the
government. It is a comprehensive approach, taking into cognizance military
threats, environmental, cyber, and guard against state secrets, while
addressing a wide range of internal aspect of security like ethnic conflicts,
kidnapping, terrorism, and corruption, with the intention of upholding peace. It
is seen as the duty and obligation of a nation's government to sustain the
existence of the state through the application of economic, diplomacy,
authority projection and political power, and protect the whole state from any
form of attack emanating from within and outside. According to Buzan (1991),
the state is the strongest entity for the improvement of national security
issues, but is gradually being challenged by civil society which demands a
larger role.
National security is not only threatened by
non-financial activities but also by financial and money movement activities.
The internet is one of the fastest-growing areas of technological
infrastructure development. With the advent of these advancements in
information accessibility and digital application in banking, comes
exponentially growing cyber-security threats (Makeri, 2017). Issues of national
security relating to financial activities, thrive on the use of digital
channels as well as cash include money laundering; regarded as criminally
conceived way of accumulating money from unauthorized business activities, and
cross border illegal currency trading. These activities facilitate crimes such
as drug trafficking and terrorism. While internal security is a constituent of
national security which focuses on threats within a country's border, national
security also includes external threats. Thus, in order to enjoy national
security, a nation needs to possess cyber security, environmental security,
economic security and energy security. In the communique issued at the 28th
Assembly of the Computer Professionals (Registration Council of Nigeria) and
Information Technology (IT) (2022), Olatunji spoke on Leveraging Information
Technology for National Security and Economic Stability, emphasizing the need
for development of indigenous digital solutions to fight crimes in our society
for national security. Micro-finance sustainability in Nigeria amidst these
financial security challenges is a mirage unless the security threats are
tackled.
3. Contemporary Internal Security Threats in Nigeria
Nigeria is known to be the most populous country in
Africa, blessed with human and material resources and highly endowed in
economic resources. Her military strength made her a major contributor to
peacekeeping operations in the African Continent and the rest of the World.
However, the strengths of the country have been weakened by countless forms of
insecurity which have adversely affected her image and status among other
smaller countries like Liberia, Niger, Sierra-Leone among others, whose
security challenges Nigeria once helped to manage.
The level of Internal security challenges in Nigeria
is so alarming that in December 2025, the country had to seek the assistance of
US military to bomb terrorist camp in some part of the country, targeting
Islamic State (ISIS) militants. These internal security challenges have led to
the destruction of schools and the abduction of secondary school students and
teachers by bandits and Boko Haram in Northeast Nigeria (Okolie et al., 2024).
In an effort to arrest the security threats in Nigeria, President Tinubu
launched 7000 forest guards in May 2025 to ungoverned forests in Borno, Sokoto,
Yobe, Niger, Adamawa, Kwara and Kebbi States to counter banditry, kidnapping and
exploitation of forest resources. Some of the contemporary internal security
threats in Nigeria include:
3.1 Boko Haram Insurgency
The meaning and the intention of this sect has been
described in various ways based on their operational strategies of targeting
prisons, worship centers, public gatherings, schools, market places, police
stations among others. Nwagbose (2018) describes Boko Haram as a terrorist
group that abhors western education, culture and the behaviours of Muslim
elites who promote western ethics. Olanrewaju et al. (2017) see Boko Haram as
the agitation of an Islamic sect with a strange commitment to non-conformist
standards of social organization in Muslim-dominated areas. From conceptual
gatherings, Boko Haram is a self-made social-political jihadist militant group
that opposes western education, man-made laws, committed to the propagation of
the teachings of Prophet Muhammed. They are more dominant in the northern part
of Nigeria.
Arguably, the intention of Boko Haram sect in Nigeria
is to dismantle the secular Nigerian state and replace it with Islamic
Caliphate governed by sharia law. Olanrewaju et al. (2017) posit that the
ultimate goal of the Boko Haram sect is to make Nigeria an Islamic State and
uphold only the laws set out in the Koran. Yusuf (2022) stated that the agenda
of Boko Haram is to ensure that Western education has no place in Nigeria. They
reject the West and the secular state and seek the universal implementation of
pure Sharia law to resolve the ills facing northern Nigeria Muslims (USCIRF,
2026).
Boko Haram sect are not only operative in Nigeria but
also in neighboring countries like Chad, Niger, Cameroon and Mali but incessant
reported attacks in Nigeria is almost on weekly basis. In March 2025, Boko
Haram released a video announcing their presence in Niger, occupying forests
and attacking communities. In Chad Basin, booming international fish market is
completely controlled by Boko Haram (ACLED, BBC Research). Boko Haram
insurgency is the most alarming security threat in Nigeria responsible for
killing, bombing, kidnapping, raping of innocent citizens and destruction of
both government and citizens' properties. Their activities have subjected
millions of Nigerians to IDP camps.
3.2 Kidnapping and Hostage Taking
Kidnapping and hostage taking in recent time is linked
to Boko Haram in contrast to when it erupted from the Niger Delta. Most kidnap,
hostage taking and ransom demand are perpetrated by the Boko Haram sect.
Notable among them is the kidnap of Chibok school girls in 2014 where 276
school girls were abducted. In 2018, Leah Sharibu was kidnapped among other 100
schoolgirls, from her school in Dapchi, Yobe state. In December 2020, more than
300 students were abducted from a boarding school in Kankara, Katsina state. In
2021, students were taken from their school in Kiagara, Niger state. In 2025,
315 pupils and staff were abducted from St. Mary's school in Niger state. The
frequency at which this dastardly activity is perpetrated brought fear in
Nigeria boarding schools and forced such schools to shut-down, and many
families to withdraw their children from boarding schools.
3.3 Forced Disappearance and Organ Harvesting
Another horrible contemporary internal security
challenge that perturbs Nigerian nation is sudden disappearance of people and
harvesting the victim's organ for ritual. While kidnapping is linked to Boko
Haram, organ harvesting resulting to forced disappearances of nation's citizens
is common in the western and eastern part of Nigeria. The high level of murder
and ritual killing in the country is such that even children are not spared. In
January 2025, a National Youth Service Corps (NYSC) member, Salome Eleojo was
brutally murdered and dismembered severally in Abuja (BBC News, 2025). In July
2025, a pregnant nurse, Ngozi Ekebe, was gruesomely murdered and dismembered in
Anambra State (Punch Newspaper, 2025). A 20 years old girl, Sofia Okeowo was
murdered and cooked in Ogun state in July 2025 (Daily Post, 2025). Numerous
cases of child stealing and baby factory ventures has also been on the increase
recently. All these ritual killing is driven by get-rich-quick mentality. These
criminal activities have continued to pose serious threat to national security.
3.4 Farmer-Fulani Herdsmen Conflict
In recent times, Nigeria has witnessed an
unprecedented level of insecurity arising from Fulani-Herders-Farmers clashes.
Traditionally, Fulanis, whose main occupation is cattle rearing move their
cattle from one geographical location to another in search of green pasture. In
the process of searching for a greener pasture for their cattle, they clash
with farmers whose farm lands and crops are raided by their cattle.
Farmer-Fulani herdsmen conflict has turned into a more disturbing internal
security threat in the country when herdsmen started moving around with guns
and ammunition. They attack farmers, rape women and kill innocent citizens in
their farmland. The activities of Fulani herdsmen resulted in Ondo State
issuance of quit notice to 'Fulanis' in the State (Aluta, 2021). Nwagboso
(2018) noted that states mostly affected by herdsmen-farmers crises are Benue,
Kaduna, Zamfara, Borno, Yobe, Adamawa, Taraba, Jigawa and Nassarawa. The Fulani
herdsmen attack on Benue state in particular is almost on weekly basis. In all
the cases of attack, the whole community is wiped out; children, women and men
burnt alive on several occasions. This resulted in most communities running
away from their homes and establishment of Internally Displaced Persons (IDP)
camp by the government in the affected states.
3.5 Niger Delta Crisis
Niger Delta crisis as one of the internal security
challenges facing Nigeria is mix of organized crime ranging from kidnapping,
piracy, cult-related and political thuggery. These were driven by
marginalization, environmental degradation from oil spills, lack of employment
and infrastructure. Before the discovery of oil, the occupation of the people
was fishing and framing which was disrupted by oil spills. This was brought to
the attention of the government to address the issue, but rather force was used
by the federal government to address the case of injustice and marginalization
of the people (Nwagboso, 2018).
It is pertinent to mention that kidnapping in Nigeria
originated from the Niger Delta region. The continued endurance by the
communities in the Niger delta and the inability of the government to address
the root causes of problem in the region resulted to creation of armed militia
groups known as Movement for the Survival of the Ogoni People (MOSOP) founded
by Ken Saro-Wiwa. The execution of Saro-Wiwa and his men provoked the militants
to indulge in activities threatful to the security of the nation and its
citizen. They shutdown oil companies, kidnap foreign oil workers as well as
indigens—marking the origin of kidnapping in Nigeria, destroy oil pipelines,
engages in unlawful bunkering of oil and destruction of government properties
in the region.
4. Concept of Microfinance
Microfinance is a lending method where credits are
extended in small amounts to poor people who are traditionally considered unbankable
and are unable to get access to conventional banking services to enable them
invest in self-employment. Microfinance has wide-range definitions all targeted
at provision of micro credits—a method by which poor families borrow certain
amounts of money at a given time and repay the amount in a stream of small,
manageable payments over a reasonable time period using social collateral in
the short term and institutional credit history in the long-run (World Bank,
2006). Expansively, microfinance refers to small-scale financial
services—mainly credit and savings, provided to individuals who farm or fish or
herd; who run small enterprises or microenterprises where goods are produced,
repaired, or sold; who provide services; who rent out small amounts of land,
vehicles, draft animals, or machinery and tools; and to other people, both
rural and urban, at the local levels of emerging countries; who work for wages,
commissions or gain income from activities. It is specifically packaged for the
poor and low-income individuals excluded from the normal system of getting
financial needs such as insurance, savings, micro-leasing, among others, aimed
at poverty reduction and increasing income.
Microfinance institutions are expected to address the
persistent issue of poverty, enhance livelihood, social and environmental
progress in the global community that will transit into overall economic
development. Muhammad and Al-Shaghdari (2025) see microfinance institutions as
potent tool for empowering women with small loans to grow their businesses,
generate income, and lift themselves out of poverty and achieve financial
independence. These institutions create extensive benefits beyond economic
empowerment because through successful business development, education, health,
and well-being of the entire family is assured, thus, breaking the cycle of
poverty and creating a ripple effect of positive change in their communities.
However, Nsofor et al. (2019) revealed that microcredit had negative and
insignificant impact on poverty alleviation in Nigeria and has not had the
desired impact on the wellbeing of the people. This may be attributed to the
precarious environment in which microfinance institutions operate. In order to
attain self-reliance and accelerate economic growth and development,
sustainability of microfinance is very crucial.
5. Insecurity Environment of Microfinance
The insecurity environment of Microfinance
Institutions (MFIs) in Nigeria is associated with despicable acts like
robberies, rituals, political thuggery, ethnic conflicts, porous border
challenges, assassination, community invasion as exist in Benue State of
Nigeria, kidnapping, fraud, money laundering, pipeline vandalization,
terrorism, cyber-crimes, all of which affects business operations and
performance and even halts their operations. These institutions have little or
no control over these dastardly acts and have to operate in such insecure
environment. All these poses a threat to Nigeria security environment and also
affects microfinance sustainability in the country.
Aluta (2021) asserts that four functional areas of
business such as finance, production, marketing, and human resource (H/R) can
also be affected. This is a signal that Nigeria is not safe for investment and
thus, obstructs microfinance investment and scares away potential foreign
investors. First, insecurity affects microfinance institution financially by
increase in the cost of precautionary measures taken to ensure safety of life
and properties. Some microfinance institutions and businesses are burnt down at
the period of crisis, leading to relocation to violence free parts of the
country. The cost of hiring security personnel, reconstruction and replacement
of damaged structures adds to the cost of operation for microfinance
institutions. Secondly, just like any other business, microfinance institution
needs raw material in the form of deposit or capital for production (lending).
Microfinance institutions require regular supply of these raw material for
production. When deposit can no longer be sourced from individuals because of
insecurity, production will cease and operation activities disrupted. Thirdly,
micro finance institutions do not only produce products but also market them by
meeting customer's needs; especially underserved individuals who lack access to
traditional bank credit. Insecurity will not be attractive for marketers in
crisis prone areas and limits market availability for microfinance
institutions. Lastly, in most cases, staff become victims of the attack and
businesses lose their experienced staff through death or injury. Human life is
very important. For fear of insecurity, people migrate to problem free areas.
Staff resign to run away from violence prone area and new people do not want to
go there for employment. This results in manpower shortage for the microfinance
which affects its sustainability.
Furthermore, insecurity environment of microfinance is
not limited to threats exacerbated in the absence of technological innovation,
but also from digital environment. Insecurity from digital environment refers
to the prevalent and increasing vulnerability to threats and harm arising from
the profound reliance on digital technology. It describes a situation where
digital information and systems are prone to unauthorized access, manipulation,
or disruption. Undeniably, all financial institutions in Nigeria have reshaped
their operations through technological advancement for improved service
delivery and customer satisfaction. The adoption of digital financial services
exposes MFIs to cyber-crime threats, human vulnerabilities and limited
resources to implement robust security measures.
As stated earlier, in order to enjoy national
security, a country has to possess cyber security. Insecurity from
technological environment also include digital operations like cyber-crime.
Cyber insecurities that affect microfinance sustainability are numerous; data
breaches, ransomware attacks and phishing scams can undermine customer trust in
microfinance institutions and expose them to financial harm. While digital
technologies have improved microfinance service operations, the increasing
digital operations like cyber-crime poses new challenges to microfinance
sustainability.
In addition, one of the objectives of the CBN cashless
policy is to reduce high cost of cash processing and facilitating an efficient
payment system, while at the same time solving national security challenges
like money laundering and robbery enabled by the use of cash by economic
saboteurs. However, the country is confronted with new challenges that are
evolving everyday which the new cashless policy is meant to eradicate. With the
cashless policy, it is expected that national security in Nigeria will take a
new turn for the better. It seems that CBN effort has been thwarted by these
criminals via cyber-crimes by the use of same digital devices to commit illegal
act like data theft, identity theft and other forms of fraudulent activities.
These criminals are economic saboteurs and threat to national security. Their
dastardly acts previously executed using cash transactions are now possible
digitally through cyber laundering, which provides the anonymity, speed and
instant global delivery. These ill-begotten fund pass through our financial
system. With the emergency of digital payment system, the sustainability of
microfinance institutions is highly threatened due to their vulnerability to
cyber-attacks. Amidst all these security challenges, the operations and continued
provision of financial services by microfinance institutions in Nigeria may
prove quite difficult given the persistent security challenges, unless the
government finds a lasting solution to guarantee safety and security of lives
and properties in the country.
6. Conclusion and Recommendations
From different forms of security threats and cases of
attacks in the country, it is clear that insecurity abounds in Nigeria. Amidst
insecurity emanating from physical environment exists technologically inclined
insecurity which also threatens microfinance sustainability. Financial
institutions occupy a unique position in nations economy and must be protected
from any form of threat. Provision of micro services to entrepreneur and
business is delusional in microfinance environment filled with uncertainty.
With mass involvement in e-businesses, businesses often find themselves heavily
dependent on technology, activities revealing information on economic,
financial and monetary movement activities. Technological advancement came with
its own security threats like cyber-crime and mobile device vulnerabilities.
Ignoring these threats leaves microfinance institutions vulnerable to potential
financial losses, reputational damage, and legal consequences, emphasizing the
need for comprehensive security measures that address these threats. Therefore,
the government, organizations, and the society at large must fight to create a
sustainable microfinance environment capable of providing affordable financial
services to the poor and socially marginalized customers to become
self-sufficient and attain their full potentials for sustainable advancement.
From the aforesaid, with the intent of ensuring
microfinance sustainability, we recommend the following measures of addressing
internal security challenges in Nigeria:
- The Federal Government of Nigeria should adopt more stringent
penalties for violent crimes such as kidnapping, Boko Haram groups,
ritualists, organ harvesters, among others to serve as deterrent to youths
that may wish to engage in such crimes.
- The government should tackle the generational causes of internal
security in the country such as poverty, unemployment, corruption,
ethno-religious crisis etc.
- The Nigerian Government should assist cattle farmers to establish
ranches across the country to prevent farmers/Fulani-Herdsmen crisis.
- The government should strengthen the general security architecture
in Nigeria especially in the northern part of the country to protect
teachers and school children from attack and abduction.
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