The Central Bank of Nigeria (CBN) has stated that it is now ready to grant more licenses to payment service firms. However, the bank has set a minimum capital base of USD 13 million for interested businesses to have before they can get the approval to operate.

That Five billion naira (the present day Naira equivalent) needs to be set aside for a separate payments company, which will be run as an entity that is independent of the parent firm’s existing operations.

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In addition to the USD 13 million necessity, the CBN has said that payment banks should mostly operate in rural areas and unbanked locations. They should accept deposits from individuals and small businesses, but are not permitted to grant loans. The interoperability this service provides, enables customers to transact with more users across more use cases.

The CBN, Nigeria’s apex bank, is licensing mobile operators as part of its policy to boost financial inclusion and in hopes to replicate the Indian and Kenyan examples of mobile money triumph.
In 2018 when the CBN first suggested mobile money guidelines for discussion, telcos argued that they are not banks, and should not be treated as such. That means, they do not need a capital base before they can offer mobile money services in the country.

The CBN’s new circular on the licensing points out that it could mandate payment banks to recapitalize for specific risks. This position is a long way from the former which totally hesitated to welcome telcos into the payments sector.
The 2019 State of the Industry Report on Mobile Money released in March by The GSM Association (GSMA), showed that sub-Saharan Africa is the epicentre of mobile money adding over 50 million registered accounts to take its total to 469 million in 2019. The transaction value was at $456.3 billion representing 27.5 percent of the $690 billion transacted globally last year.

The region’s dominance also reflects in transaction volume and value as sub-Saharan Africa accounted for over 60 percent of the $690 billion transacted through mobile money services last year.

Although East Africa remained the capital of mobile money activities accounting for 53 percent of total accounts in 2019, West Africa saw strong growth recording 21 million new accounts representing 35 percent while Central Africa saw 6 million new accounts – about 10 percent.

The GSMA predicts that adoption across sub-Saharan Africa will remain strong and that the region will surpass the half-billion mark by the end of 2020.

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