New Banking Model At Play In Nigeria
By Vincent Nwanma
A financial model designed by the Central Bank of Nigeria to open up the country’s financial-services sector is unfolding, set to kick off later this year. Telecoms are among the 30 applicants currently being registered by the central bank to operate as Payment Service Banks (PSBs), and their likely encroachment has already sparked fresh action by traditional banks.
PSBs are a new category of bank, with smaller-scale operations, the absence of credit risk, and foreign exchange operations. According to guidelines released last October by the central bank, PSBs are expected to take advantage of mobile and digital channels to enhance financial inclusion and stimulate economic activities at the grassroots level.
A telecoms-led financial-inclusion model is already operating in some African countries, including Kenya, Ghana and Côte d’Ivoire (Ivory Coast). These countries already have higher levels of financial inclusion than Nigeria.
Photo courtesy of Shardayyy.