CBN publishes regulatory framework for mobile money services aimed at fostering financial inclusion



In an effort to improve financial inclusion, the Central Bank of Nigeria (CBN) recently released regulatory guidelines and a framework for mobile money services in the country.

According to the CBN, the advent of mobile telephony in Nigeria, its rapid development and acceptance, and the recognition of person-to-person payments as a viable approach to financial inclusion have made the use of the mobile channel essential to foster financial inclusion among the unbanked.

Financial inclusion continues to gain traction among policymakers, academics and development organizations around the world. Its importance stems from its potential as a vector of economic growth, particularly in terms of poverty reduction, job creation, wealth creation and increase in well-being and overall standard of living. .

Under Section 47 (2) of the 2007 Act, the Central Bank of Nigeria (CBN) is empowered to promote and facilitate, in accordance with its mandate to promote a sound financial system in Nigeria, the establishment of ‘an effective and efficient trading system arrangements, including electronic payment systems. CBN therefore introduced the guidelines on mobile money services in Nigeria with the aim of promoting financial development.

This guideline covers the business regulations governing mobile money service operations and describes the basic characteristics required of any mobile payment service and solution in Nigeria. It describes and defines the participants of the mobile money service system in their expected roles and functions. It also lays the groundwork for the regulation of services provided at various levels by participants.

Key takeaways from CBN guidelines

These guidelines defined two models for implementing mobile money services: bank-led (the bank and / or its consortium as lead initiator) and bank-led (a legal entity regulated by the CBN as the main initiator).

The bank-led model

This is a model in which a bank, either alone or as a member of a consortium of banks, aims to provide financial services through the mobile payment system. This model can be used in situations where the bank operates independently or in partnership with other banks and other authorized organizations. One bank or group of banks will serve as the primary initiator.

The non-banking approach

This approach allows a legal person duly licensed by the CBN to provide mobile money services to users. A commercial organization (other than a depository bank, national mortgage bank, national microfinance bank, or telecommunications company) that has been explicitly authorized by the CBN to provide mobile money services in Nigeria will be l main initiator.

The following practices are prohibited for mobile money operators:

  • The granting of any type of loan, advance or guarantee (directly or indirectly).
  • Acceptance of foreign currency deposits.
  • Trade in the forex market except as permitted by section 4.1 (ii) and iii) of the Current Guidelines for the Licensing and Regulation of Payment Service Banks in Nigeria.
  • Insurance subscription.
  • Accept any closed-ended electronic value (eg airtime) as a form of deposit or payment.
  • Establish an affiliate and engage in any other transaction not authorized by these guidelines, as well as any other conduct that the CBN may deem illegal.

Mobile Money Operators (MMOs) must establish specific processes that cover the entire solution delivery process, including user registration and management, agent recruitment and management, consumer protection , dispute resolution procedures, risk management procedures and transaction settlement. All participants in the mobile money ecosystem will be covered by these processes, which will span the entire value chain.

The savings portfolio fund will be invested only in Nigerian Treasury Bills (NTBs), MMOs will be treated as clients mandated by CBN for the NTB subscription through a CBN NTB window. MMOs will use their Savings Wallet Master Pool accounts as a process to determine the appropriate money balance, which will meet clients’ savings wallet withdrawal requirements at all times.


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