With the Central Bank of Nigeria (CBN) keen on revoking the licenses of Mobile Money Operators (MMOs) that fail to achieve the minimum cash balance of N2 billion by the end of the first half of 2018, a possible threat faces the 80 percent financial inclusion target by 2020.
According to the CBN directive, any MMO that fails to meet the recapitalisation requirement will have to be put out of business with the grace period ending June 2018.
On the impact the license revoking by the CBN will have on financial inclusion, considering the apex bank has a target of including 80 percent of NIgerian inot the financial cycle by the year 2020.
“Those MMos that cannot meet with the requirement should merge or be acquired, else you may have MMOs that will default,” Ashiru told BusinessDay in a phone response.
“Its effect on financial inclusion is two fold; one, you have only people with the capacity to deliver in operation and this could force things like partnership just like the bank reforms of 2005, which left us with strong banks with the capacity to do the business,”Yewande Adewusi, a financial inclusion consultant told BusinessDay in a phone response.
The opinion of Ashiru, the Lagos-based analyst was not different as he said in a long run, the license revoking by the apex bank will not have negative impact on financial inclusion in Africa’s largest economy.
“There was a time we had over 80 banks but today , there are less banks but with much capacity,” Ashiru said.
Ashiru concluded by saying that CBN have to make sure MMOs do not have certain threshold regarding capitalisation.
Meanwhile, the apex bank seem quite eager on implementing this requirement having grown the initial requirement from N500 million to the current target of N2 billion with a reasonable time for MMOs to comply.
“We expect any serious operator to meet the requirement. To the best of my knowledge, there is no plan to shift the deadline” Isaac Okorafor, Director, Corporate Communications, CBN, said after the directive was issued.
With two years down the lane for the 20 percent financial exclusion rate among Nigerian adults, revoking the licenses of MMOs could grave effects on the 80 percent inclusion rate,an analyst who asked not to be quoted said.
“We have so many players and a lot of them are not doing anything, so what they are trying to do is to ensure the players in the sector have the capacity to deliver on the business.”Adewusi explained.
According to a BusinessDay survey, of the currently licensed 21 MMOs in the country, 15 likely are to face the risk of being put out of business due to the minimum recapitalization requirement.
Meanwhile, Mobile money is a platform that leverages the Unstructured Supplementary Service Data (USSD) platform on mobile networks to carry out financial transactions from one person to another.
