After years of market development, digital finance in Nigeria has still yet to take-off. The market is still experiencing some regulatory impediments, but most of all, providers need improved strategic approaches to their products, their core operations and expansion strategies.
The Regulatory Framework and Guidelines on Mobile Money Services in Nigeria issued by CBN on its website, classified the services as bank-led, which is a bank and/or its consortium as lead initiator opposed to non-bank led, which is a corporate organisation duly licensed by CBN as lead initiator, in many cases a mobile network operator (MNO). Telcos are restricted to act solely as MNO providing infrastructure for this payment space.
The bank-led model allows a bank either alone or a consortium of banks, whether or not partnering with other approved organisations, seek to deliver banking services, leveraging on the mobile payments system. This model would be applicable in a scenario where the bank operates on stand-alone basis or in collaboration with other bank(s) and any other approved organisation.
The Helix Institute of Digital Finance had published the “The Agent Network Accelerator Survey: Nigeria Country Report 2014″ in June 2014 which describes in detail local regulation, strategy & systems, the operational framework, and potential future developments for digital finance in Nigeria. With regards to the models proposed in this survey, however, the recently approved CBN Guideline seems to have merged the bank-led and bank-focused models, leaving only bank-led, or non-bank-led.
According to CBN, the lead initiator shall be a corporate organisation (other than a deposit money bank or a telecommunication company) specifically licensed by CBN to provide mobile money services in Nigeria. Under this arrangement, the participants are grouped into six categories: regulators (CBN), Nigerian Communications Commission (NCC), mobile money operators, infrastructure providers, other service providers, consumers and mobile money agents.
Let´s hope that his CBN clarification will provide some momentum for digital finance in Nigeria!