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In a significant development for Nigeria’s fintech sector, the Central Bank of Nigeria (CBN) has announced that mobile money operators, including major players like OPay, Palmpay, Kuda Bank, and Moniepoint, will soon be able to resume enrolling new customers. This announcement was made by CBN Governor Olayemi Cardoso during the 295th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday. The MPC also decided to raise the interest rate from 24.75% to 26.25%.
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Strengthening Operational Frameworks
Governor Cardoso highlighted the CBN’s ongoing dialogues with industry stakeholders aimed at enhancing operational frameworks. The focus is on implementing robust measures to combat money laundering and other illicit financial activities, thereby improving both the onboarding processes and the management of existing customers.
“I am confident that as time goes on, and hopefully in another couple of months, all these will be something of the past and then you will see that sector going back into what they’ve been known to do before, but certainly with a very stronger regulatory framework,” said Cardoso.
Background of the Ban
In April, the CBN had paused new customer enrollments by fintech companies. This move, perceived as a regulatory measure, sparked concerns and speculation about a potential crackdown on the sector. However, Governor Cardoso clarified that the decision was not an attempt to single out or target fintech firms unfairly.
“The fintechs have not been singled out for any exceptional kind of treatment,” Cardoso stated, emphasizing the CBN’s appreciation of the sector’s achievements and ongoing support for its growth.
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Addressing Illicit Financial Activities
The CBN’s scrutiny of the fintech sector is rooted in concerns over illicit financial flows and money laundering. Rapid growth in the sector necessitated a closer examination and the implementation of heightened regulatory measures.
“More recently, we had the course to take a deep dive look at the whole issue of illicit flows and money laundering particularly within the non-heavily regulated banking system,” Cardoso noted. The CBN has collaborated with security agencies to identify areas needing tighter regulation and surveillance.
Regulatory Measures and Industry Support
Cardoso assured that the CBN’s actions were aimed at strengthening, not stifling, the fintech sector. The bank has not revoked the licenses of any fintech organizations, despite the temporary halt in new customer registrations.
“For that reason, we were concerned about how we saw the issue of anti-money laundering and illicit flows as they made their way within the various sub-sectors of the financial industry and we felt there was a need for us to take a breather and work with different players to strengthen regulations, not by any means to throw them out of business,” he explained.
Industry Reaction
The announcement has been met with relief and optimism within the fintech community and among bank customers who had experienced unease during the ban. The Bank Customers Association of Nigeria has expressed support for the CBN’s directive, recognizing the importance of robust regulatory measures to ensure the sector’s integrity and stability.
Conclusion
The resumption of new customer registrations for mobile money operators marks a positive step forward for Nigeria’s fintech industry. With enhanced regulatory frameworks and continued dialogue between the CBN and industry players, the sector is poised for a stronger and more secure future. For ongoing updates and detailed analysis, stay tuned to our blog.
Source: TechLifewithHugo
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