Just as the Brookings Institution recognised Nigeria’s “demonstrated clear national-level commitment to advancingfinancial inclusion”, an aggrieved provider of international money transfers to the West African country described new rules by the Central Bank of Nigeria (CBN) as ‘draconian’.
This follows a directive from CBN stating “… all licensed International Money Transfer Operators, in line with the CBN Circular on the sale of foreign currency proceeds of July 22, 2016, are required to remit foreign currency to their respective agent banks in Nigeria for disbursement in Naira to the beneficiaries…”
CBN warned Nigerians of “some unlicensed International Money Transfer Operators (IMTOs) in Nigeria” and its unwillingness to condone any attempt to undermine the country’s foreign exchange regime.
Looking at the implication of such move by Nigeria’s apex bank on the country’s financial inclusion level, it shows that the money transfer grip in the country has been returned to the three operational MTOs as was the case in the past. At some point, for example, Western Union controlled about 78% of transfers to Nigeria.
However, their higher transfer charges, lower foreign exchange rates and the uneasy access to their services brought the disruption introduced by these mostly-mobile money transfer service providers in the first place.
The technology employed by these new entrants, including Azimo and SimbaPay, helps cut operational costs yet deliver at a quicker pace.
With any internet-configured phone or smartphone, this new crop of MTOs allow the sending and receiving of money online from a mobile device at a low-cost and conveniently. They also offer additional services such as instant airtime top-up for call credits.
These factors make their services transcend locations, opening up access to remitted fund without much consideration for a mobility barrier.
In the newly-released 2016 Financial and Digital Inclusion Project, which is an evaluation of access to and usage of affordable financial services by underserved people across 26 geographically, politically, and economically diverse countries, the Brookings Institution gave Nigeria a 72% score and ranked it tenth out of 26 countries.
It says though mobile money has not yet reached scale in Nigeria, several initiatives by its government to advance digital payment services, agent banking, and consumer protection initiatives in the past year “should promote increased adoption of formal financial services by expanding distribution points, increasing consumer confidence, and reducing crowding within the mobile money market.”
However, this projection may not be achieved if the supposed temporary suspension of IMTOs such as WorldRemit, which reportedly sends more than 40,000 money transfers to Nigeria every month, is not resolved on time.
Nigeria receives more than $20bn in remittances annually from migrants around the world.
However, their higher transfer charges, lower foreign exchange rates and the uneasy access to their services brought the disruption introduced by these mostly-mobile money transfer service providers in the first place.
The technology employed by these new entrants, including Azimo and SimbaPay, helps cut operational costs yet deliver at a quicker pace.
With any internet-configured phone or smartphone, this new crop of MTOs allow the sending and receiving of money online from a mobile device at a low-cost and conveniently. They also offer additional services such as instant airtime top-up for call credits.
These factors make their services transcend locations, opening up access to remitted fund without much consideration for a mobility barrier.
In the newly-released 2016 Financial and Digital Inclusion Project, which is an evaluation of access to and usage of affordable financial services by underserved people across 26 geographically, politically, and economically diverse countries, the Brookings Institution gave Nigeria a 72% score and ranked it tenth out of 26 countries.
It says though mobile money has not yet reached scale in Nigeria, several initiatives by its government to advance digital payment services, agent banking, and consumer protection initiatives in the past year “should promote increased adoption of formal financial services by expanding distribution points, increasing consumer confidence, and reducing crowding within the mobile money market.”
However, this projection may not be achieved if the supposed temporary suspension of IMTOs such as WorldRemit, which reportedly sends more than 40,000 money transfers to Nigeria every month, is not resolved on time.
Nigeria receives more than $20bn in remittances annually from migrants around the world.
Posted by Janice Johnson (Source: ITwebafrica)
