CBN cites regulatory impediments for restricting telecom mobile banking

By The Citizen

The Central Bank of Nigeria (CBN) yesterday said that telecommunication companies were restricted from offering mobile banking services in the country because the apex bank did not have direct control over them.

The Director, Banking and Payment System Department, CBN, Mr. Dipo Fatokun, stated this while speaking at the ongoing 18th central bank seminar for finance correspondents tagged: 'Financial Inclusion in Nigeria: Issues, Challenges and Prospects,' in Umuahia,

Fatokun also argued that there was a lack of synergy between mobile payment operators and telecommunication companies in the country.

'What we have seen is that because of the way mobile payment had taken off in some countries where telecoms companies were in the forefront, the Nigerian scenario is quite different. We excluded telcos from providing mobile payment because of reasons of not having direct control over them.

'The CBN believes that the core business of the telecom companies is not banking and payment and therefore it does not have supervisory power over telecom operators,' Fatokun who was represented by the Payment Policy Manager, CBN,” Mr. Chai Gang said.

According him, in the last decade, there had been an explosion of different forms of remote access to financial services, beyond branches.

These, he pointed out,  had been provided through a variety of different channels, including mobile phones, automatic teller machines (ATMs), point-of-sales (POS) devices and agent banking.

'One of the main obstacles to financial inclusion is cost: both the cost to banks involved in servicing low-value accounts and extending physical infrastructure to remote rural areas, and the cost (in money and time) incurred by customers in remote areas to reach bank branches,' he said.
On his part, the Director, Development Finance Department, CBN, Mr. Paul Eluhaiwe, revealed the N200 billion Micro, Small and Medium Scale Enterprises Development Fund proposed by the central bank, would be inaugurated in August this year. The fund, according to him, would help promote financial inclusion.

'The fund should have been launched when the financial inclusion strategy was inaugurated last year. It will be open to microfinance banks and other institutions to access the fund for on-lending to micro and small enterprises. 60 per cent of that fund is supposed to go to women and that is aimed at expanding financial inclusion,' he explained.