Telcos to begin super-agent banking
THE CENTRAL BANK OF NIGERIA (CBN) says telecommunication companies (telcos) would soon be granted licenses to operate as super agents in the financial services system towards a speedy implementation of its financial inclusion strategy.
THE CEN TRAL BANK OF NIGERIA (CBN) says telecommunication companies (telcos) would soon be granted licenses to operate as super agents in the financial services system towards a speedy implementation of its financial inclusion strategy.
Dipo Fatokun, the acting director of payment services at the CBN, disclosed this recently during a panel session at the 2018 annual national conference of the Finance Correspondents Association of Nigeria (FICAN), with the theme: “Banks, Fintechs and Nigeria’s Financial Inclusion Journey,” held in Lagos, recently.
The admission of telcos into the super agent scheme would complement the earlier approval-in-principle to two companies—Innovectives Limited and Interswitch Financial Inclusion Services Limited—to operate as super agents.
In 2015, the CBN issued the “Licensing Framework for Super Agents” to encourage other infrastructure providers and operators, including telcos, to provide shared agent network services, is expected to rapidly expand financial inclusion touchpoints and extend digital financial services across the country.
According to Fatokun, who was represented by Taiwo Oladimeji, deputy director, banking and payment systems department of the CBN, four of the telcos are currently processing licenses as super-agents under the mobile money operations framework.
He said Globacom’s subsidiary, Money Masters, has been granted a mobile money super-agent license for over six months, while applications for MTN’s subsidiary, Yellow Digital and that of Airtel’s , Airtel Mobile Commerce, are under processing.
Explaining that the licenses will grant telcos the ability to carry out financial services just like Kenya’s Mpesa, he said, “there is nothing which you can do as a super-agent that you can’t do as telcos are doing in Kenya.”
On other banking agency licensing he stated that “there is no gainsaying the fact that financial inclusion is the way to go, it’s very important because of the benefits and gains, and it’s in order to achieve all this benefits that the CBN started putting some framework in place, one of them is the agent banking framework”
He explained that the framework, which is particularly concerned with consumers at the tail-end of accessibility usually referred to as the last mile customer, would facilitate agents of banks that will be nimble and compact to deliver the last mile service, adding, “there is no bank that will be able to be present in all the hamlets in Nigeria in the short term.”
Amongst the frameworks the CBN has put in place to drive financial inclusion, Fatokun further pointed out the importance of agent location through the Shared Agent Network Framework (SANEF) initiative, which aims to create 500,000 agent location over a period of two years.
He said, “regardless of the models that we try to adopt, agent location are key, because if you use a mobile phone to send money to me and I want to cash out I need to get an agent.”
Speaking on the issue of low mobile money adoption, which stands at 3 percent as at 2017, Fatokun explained that there are a number of constraints, including supply and demand issues.
“Financial access is different from use. There are people living or working in Victoria Island today, who have some of the best access to financial institution but don’t use financial services, so the issue is not just about providing financial access.”
He noted that ideas to breach these gaps are welcome by the CBN, advising startups or existing players who have new products or solutions for unbanked and under-banked to write the apex bank after which they will be invited to make a presentation.
“If you have a solution that will bring payment for banking, insurance, pension, etc. to some far flung areas, just come, you don’t need to be a licensee before you come on board,” he said.