Mobile money operators can issue cards but not loans or insurance, according to CBN


The Umbrella Bank of Nigeria has decided to improve public access to mobile money services in Nigeria.

Released on July 9, the Central Bank of Nigeria posted its Framework and guidelines for mobile money services to its website. The 40-page regulatory framework aims to help Nigerians access financial products and services through mobile money.

In Ghana, mobile money services are widely used as they provide unconventional services, such as interbank transfers to their customers. In Nigeria, they are popular because banks are difficult to access in rural areas.

In the future, services like that of First Bank Firstmonie, Kudi Mobile, and MTN MoMo will be linked by the framework’s objectives which include promoting the security of mobile money services, reducing the dominance of cash in the economy and creating an enabling environment for the adoption of mobile money services in the country.

Financial inclusion for the unbanked

In 2020, at least 55% of the Nigerian population was still unbanked according to the Report on Access to Financial Services in Nigeria. While the biggest contributing factor to this remains low income, next on the list is lack of access to banking services, as 44% of the unbanked population live in rural areas.

Image source: EFInA Access to Financial Services in Nigeria Survey 2020

About 70 million Nigerians live in rural areas where banks are too far from where people live or work. At least two-thirds of the number are unbanked, a small percentage of whom use informal methods of banking systems such as savings groups or cooperatives. The majority of the rest do not use these banking services, whether formal or informal.

Of the 1.2 billion mobile money accounts in the world, West Africa has 192 million accounts at least 15.3 million Nigerians contributing to the number.

CBN appears to be prioritizing a significant reduction in this number by providing streamlined access to mobile money services. Since 2018, the percentage of Nigerians with bank accounts has increased by at least 5%, and this is largely due to the rapid increase in mobile money services.

Who is concerned ?

The framework regulates the activities of everyone involved in the mobile money ecosystem, from mobile money operators to banks, telecommunications companies, agents and consumers.

It also lists activities permitted and not permitted under its business rules, allowing mobile money operators to create wallets and even issue cards while prohibiting them from issuing insurance or accepting deposits to. abroad. The most notable restriction on the unauthorized list in section 7.2.2 is found in subsection (a) which prevents operators from granting “any form of loans, advances and guarantees (directly or indirectly) .

By giving consumers certain rights and responsibilities, the framework provides in section 8.5 for the rights of consumers to ease of use, ease of registration and accessibility to funds at the end of the transaction process.


Modern financial services can often be untrustworthy, which has contributed to the increase in the number of unbanked people. From transfer errors to debit alerts and unresponsive customer service, there are a number of reported incidents with mobile money services available online.

The new framework also advances consumer protection measures, requiring operators, in section 18. (f), to resolve all customer complaints within forty-eight hours.

While the framework provides a list of sanctions against operators who fail to put these measures in place, it fails to provide details on how consumers will be compensated when a sanction is raised.

Legislation is hardly a problem in Nigeria. When it comes to creating laws, no matter how obscene, Nigerian lawmakers are quick to get started. The implementation remains there and one can only wonder if the last attempt of CBN will allow a reduction of the unbanked, in the months to come.

Leave A Reply

Your email address will not be published.