MTO calls for restoration of money transfers to Nigeria

From OKORO CHINEDU in Lagos, Nigeria

LAGOS, (CAJ News) – A leading online remittance provider has called for their urgent restoration of money transfers to Nigeria as so-called draconian new rules leave virtually all money transfer operators (MTOs)
unable to provide services.

WorldRemit’s call comes after it emerged only three companies – Western Union, MoneyGram and Ria – will be able to continue operations after a decision by the Central Bank of Nigeria (CBN).

WorldRemit, in common with all other international MTOs, have been instructed by its local correspondents that transfers to Nigeria will no longer be processed and is, accordingly, suspending services immediately.

WorldRemit denounced the move as “extreme” and “unexpected.”

“This move is arbitrary, inexplicable and hugely detrimental to the Nigerian diaspora who rely on hundreds of money transfer companies and banks, providing them with choice, convenience and competitive pricing,”
said founder and Chief Executive Officer, Ismail Ahmed.

He bemoaned a lack of clarity on why this “sudden” change had 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.”

He said this reversed 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 percent of the market share when CBN outlawed exclusivity agreements with local banks.

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

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.

WorldRemit is the world leader in transfers to Mobile Money accounts and had been planning to launch remittances to Mobile Money services in Nigeria.

“It looks like all systems in Nigeria are currently geared against encouraging new entrants and competition in the mobile remittance markets.
That is worrying in the extreme,” said Ahmed.

WorldRemit sends more than 40 000 money transfers to Nigeria every month.

Nigeria received more than $20 billion in remittances annual from migrants around the world.

CAJ News

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