CBN approves DMBs operating mobile money without giving it notice
By Kenneth Afor
The Central Bank of Nigeria (CBN) has given Deposit Money Banks (DMB) in the country the approval to operate mobile money services without its notice.
This was stated in a circular titled: ‘Operation of mobile money wallets by DMBs’ released by the country’s apex bank on Thursday.
The circular stated, “The Central Bank of Nigeria remains committed to deepening financial inclusion in line with its objectives to achieve the national financial inclusion target of 80 per cent by 2020.
“To complement recent growth in the agent banking services under the Super Agent and SANEF initiative, and in recognition of the increasing demand for no-frills mobile money services, the CBN hereby directs that Deposit Money Banks shall henceforth not require prior approval to offer mobile money wallet services”.
It added, “DMBs are, however, expected to notify the CBN before the commencement of these services and are required to operate within the extant regulations on mobile money operations.”
The mobile money wallet started in the country in 2009 as an alternative for easy and quick transaction of money from one individual’s account to another account. The service provider will open an account via the person’s mobile number funded with cash, which is similar to the bank account system.
The operation came into existence in the country with Paga in 2009 and started operations in 2011 by providing financial transaction platform for individuals and SME’s.
With this breakthrough, it has enabled individuals to transfer money to friends and relations in other locations where there are the presence of the service providers and enabling those who want to pay their utility bills to do so without necessarily going to the banks or such corporations to pay their bills.
The service since its existence has made banking and financial services available in rural areas across the country thereby reducing long queues in most places where few banks are located.
In another circular, signed by Ahmad Abdullahi, the apex bank’s director of banking supervision, CBN, giving directives to operators to maintain a certain percentage of loan to its customers, it stated, “All DMBs are hereby required to maintain a minimum Loan to Deposit Ratio of 60 per cent by September 30, 2019. This ratio shall be subject to quarterly review.
The directive would enable SME owners have more and easy access to loans to finance their businesses.
“To encourage SMEs, retail, mortgage and consumer lending, these sectors shall be assigned a weight of 150 per cent in computing the LDR for this purpose. The CBN shall provide a framework for classification of enterprises/businesses that fall under these categories.
“Failure to meet the above minimum LDR by the specified date shall result in a levy of additional Cash Reserve Requirement equal to 50 per cent of the lending shortfall of the target of the LDR.” The circular stated.