Beware of unregistered money transfer operators  – CBN

By Odunewu Segun

Nigerians at home and in the diaspora have been warned to beware of the unwholesome activities of some unlicensed International Money Transfer Operators (IMTOs) in Nigeria.

The warnings was contained in a statement signed by Isaac Okorafor, acting Director, Corporate Communications of the Central Bank of Nigeria. He said the warning has become necessary because of the activities of some unregistered IMTOs, whose modes of operation are detrimental to the Nigerian economy.

He said, all financial service providers in Nigeria, just as in other jurisdictions, were required to be duly licensed in order to protect both customers and the financial system as well as to ensure the credibility of financial transactions.

Meanwhile, WorldRemit, an online remittance provider yesterday issued a statement calling for the urgent restoration of money transfers to Nigeria, saying “draconian new rules leave virtually all money transfer operators (MTOs) unable to provide services to the West African country.”

The company which sends more than 40,000 money transfers to Nigeria every month lamented that only three companies – Western Union, MoneyGram and Ria will be able to continue operations, following an extreme and unexpected move by the Central Bank of Nigeria.

ALSO SEE: 14% lending rate by CBN will lead to higher commodity price — MAN

According to the founder and CEO of WorldRemit, Ismail Ahmed said, this move is arbitrary, inexplicable and hugely detrimental to the Nigerian diaspora who rely on a hundreds of money transfer companies and banks, providing them with choice, convenience and competitive pricing.

“Even now, as we suspend our service, there is no clarity on why this sudden change has happened. If it is on the basis of new rules, there was no warning. If it is a re-interpretation of old rules, local correspondent networks and banks should have been forewarned.

“This reverses the progress made by the country when the Nigeria Central Bank banned Western Union’s exclusivity agreements that had created a near-monopolistic position in the international money transfer market. Western Union controlled 78% of the market share when CBN outlawed exclusivity agreements with local banks.”

Until now, money transfer operators such as WorldRemit operated via partnerships with licensed local correspondents in Nigeria, enabling transfer of funds to local bank accounts – providing a more efficient service than the SWIFT infrastructure.

The company also raised concerns about a 2015 memorandum from the Central Bank of Nigeria, setting out minimum requirements for companies offering international Mobile Money transfer services to Nigeria.

The guidelines specify that any company offering Mobile Money transfers must have minimum net assets of $1bn and have been operating for more than 10 years.