Tuesday, 01 September 2020 05:23

CBN fixes capital base requirement for mobile money licence

Rate this item
(0 votes)

Central Bank of Nigeria (CBN)  said it will grant more licences for payment service banks but has set a minimum capital base of $13 million, which could deter telecoms firms and some other potential new entrants to the digital financial services sector.

CBN in a circular on Monday said that telecom firms, banking agents, retail chains and postal services could apply for licences to become payment banks. To do so they must set up a separate company for it with a minimum capital of 5 billion naira ($13 million) and run it as an independent entity from their existing operations.

The bank has granted three licences so far to 9PSB, a unit of local telecom firm, 9mobile, and two others.

Nigeria wants to open up its digital financial services sector, which will help millions of Nigerians who do not have bank accounts. But regulation has been caught up with intense lobbying from lenders seeking to protect their turf in the wake of intense competition and weakening asset quality.

MTN, which is yet to receive approval, last year launched a mobile money transfer service, targeting those without bank accounts in a bid to secure the central bank's approval for a payments licence.

More than half of Nigeria’s population of 180 million do not have a bank account.

The success of mobile money in east Africa has convinced investors and the industry that financial services are the next growth area for the telecoms sector, where prices for basic services are falling.

But the licensing requirement in Nigeria risks putting off telecom companies. When central bank issued preliminary guidelines for payment banks in 2018 for discussion, telecom companies argued that they are not banks and do not need a capital base.

CBN said in its circular that it could ask payment banks to recapitalise for specific risks.

Payment banks should operate mostly in rural areas and unbanked locations, accepting deposits from individuals and small businesses, central bank said. They cannot grant loans, it said.

 

Reuters

December 23, 2024

Investors on NGX gain over N1trn in 5 days

The Nigerian Exchange Limited (NGX) posted strong gains last week, with investors adding more than…
December 20, 2024

Atiku questions alleged hack of NBS website, says timing suspicious

Former Vice President Atiku Abubakar has raised concerns over the recent claim that the website…
December 22, 2024

How to know if your memory lapses are serious or not

The older I get, the more panicked I become when something slips my mind. Is…
December 21, 2024

‘Professional Back-Scratchers’ charge up to $130 per hour

The Scratcher Girls is an unconventional relaxation therapy studio that charges clients up to $130…
December 21, 2024

NAFDAC busts illegal rice repackaging operations in Nasarawa, Abuja

The National Agency for Food and Drug Administration and Control (NAFDAC) has cracked down on…
December 23, 2024

Here’s the latest as Israel-Hamas war enters Day 444

Israel's Netanyahu eyes Iran after triumphs over Hamas, Hezbollah, Syria 2025 will be a year…
December 20, 2024

OpenAI launches voice and text access to ChatGPT through new phone service

OpenAI has introduced a novel way to interact with its popular ChatGPT artificial intelligence system…
December 17, 2024

Ademola Lookman named 2024 CAF Men’s Player of the year. These players won in other…

Ademola Lookman, the Super Eagles winger, was crowned the 2024 CAF Men’s Player of the…

NEWSSCROLL TEAM: 'Sina Kawonise: Publisher/Editor-in-Chief; Prof Wale Are Olaitan: Editorial Consultant; Femi Kawonise: Head, Production & Administration; Afolabi Ajibola: IT Manager;
Contact Us: [email protected] Tel/WhatsApp: +234 811 395 4049

Copyright © 2015 - 2024 NewsScroll. All rights reserved.