The one thing that Fintech has made possible to the point of looking almost casual is the astonishingly speedy movement of money across the globe. International remittances and transfers have come a long way from the era of money transfers that usually took up to a week and a lot of frustrating Due diligence checks. 

International Money Transfer services (along with International Mobile Money Remittance services) have proved to be a lifesaver for Nigeria in general and the Nigerian Fintech ecosystem in particular, with some reports confidently placing estimated Foreign exchange remittances to Nigeria at $25 Billion a year!  

However, the Regulatory Framework governing International Money Transfer services is still as thorough as ever, which is why this article will be dealing with the following topics specifically:- 

– The Regulatory Framework governing International Money Transfer services in Nigeria. 

– The licensing requirements for International Money Transfer service operators (IMTOs) in Nigeria. 

– The full extent of permissible and non-permissible activities for International Money Transfer service companies in Nigeria. 

What is the Regulatory Framework governing International Money Transfer services in Nigeria? 

International Money Transfer services are regulated by the Central Bank of Nigeria (CBN) through the Banks and Other Financial Institutions Act (BOFIA) and specifically the CBN Guidelines For The Operation of International Money Transfer Services in Nigeria 2014(or ‘The IMTO Guidelines’). 

What are the permissible and non-permissible activities stated for International Money Transfer Service companies under the IMTO Guidelines? 

Permissible Activities 

IMTOs are permitted to :- 

– Accept monies for the purpose of transmitting them to person’s resident in Nigeria or another country. 

– Render cross-border personal money transfer services such as monetary transfers towards family maintenance & monetary transfers services for foreign tourists visiting Nigeria. 

– Render cross-border money transfers between individuals only.  

Non-Permissible Activities 

IMTOs are not permitted to:-  

– Engage in monetary transfers between individuals and corporate entities(based on Anti-MoneyLaundering (AML/CFT) requirements). 

– Engage in Moneylending. 

– Act as an authorized dealer in precious metals. 

– Engage in taking monetary deposits as a service. 

– Engage in maintaining current accounts for its customers. 

– Establish letters of credit. 

– Act as a funds custodian for customers. 

– Engage in Institutional transfers. 

– Buy Foreign exchange from the domestic Foreign exchange market for settlement. 

What are the licensing requirements for IMTOs?  

To secure an IMTO license you need to do the following :- 

– submit an application prepared by your lawyer to the office of the Director, Trade & Exchange Department of the Central Bank of Nigeria with the following attachments- 

a). a resolution of your company’s board of directors deciding to offer International Money Transfer services; 

b). a copy of your company’s certificate of incorporation and MEMART (Memorandum &Articles of Association); 

c). a documented copy of your company’s shareholding structure; 

d). statutory Corporate Affairs Commission (CAC) forms on allotment of shares & the particulars of your company’s directors; 

e). profiles of the board of directors and management of your company including their resumes, functional email addresses & numbers along with the company ownership, governance and management structure; 

f). your company organogram; 

g). your company’s business plan; 

h). the IT policy of your company; 

i). the Enterprise risk management framework of your company; 

j). contingency & disaster recovery plan; 

k). credit reports from a licensed credit bureau for the shareholders & key officers of the IMTO; 

l). a 3 years Tax clearance certificate; 

m). your project deployment plan; 

n). a non-refundable application fee of 500Thousand Naira payable to the Central Bank of Nigeria; 

o). evidence of meeting the minimum paid up capital requirement of 2 Billion Naira for Nigerian companies and 50 Million Naira for Foreign companies backed by a guarantee from the parent company based overseas; 

p). evidence of presence in at least 7 countries; 

q). a letter of no objection from the Central Bank of Nigeria where an IMTO license applicant wants to engage in partnership with a foreign technical partner in starting up a worldwide or regional Money Transfer service, in addition to which there must be proof of the Foreign technical partner having a minimum net worth of $1 million as well as being a licensed & registered entity in its home country and having evidence of being firmly experienced in the business of money transfer services. 

Are there legitimate ways of carrying out International Money Value transfer services in Nigeria without the use of an IMTO license for smaller Fintech companies unable to afford the licensing costs? 

Yes, there are. You’ll need to consult your lawyer to find out the options available to you. 

Conclusion :- It is hoped that a basic understanding of how IMTOs work has been achieved with this write-up. This article is however not exhaustive, so you’ll need to further guidance from trained professionals if you’re thinking of venturing into this business going forward.

China’s economy has struggled to overcome shocks emanating from a series of events including covid-19 and the crackdown on the internet industry.

The situation has resulted in huge loss of revenue to companies. As the economy takes more hits, companies are beginning to downsize to stay afloat.

Tech giant Tencent has cut more than 5,000 staff and shut down parts of its business as it grapples with its first sales fall in its history, the BBC reports.

Revenue at the firm slipped 3% year-on-year in the April-June period, hit by declines in ad spending and at its online gaming business.

The WeChat owner, which has reported double digit growth almost every quarter since it went public in 2004, is feeling the effects of a regulatory clampdown on gaming, as well as wider economic downturn.

China’s central bank on Monday cut interest rates to try to spur activity.

The country, which continues to respond to Covid outbreaks with mass shutdowns, last month reported its economy had contracted sharply in the three months to July and signaled it may miss its official 5.5% growth target.

In an appearance on Tuesday, Chinese Premier Li Keqiang said China was facing “the most difficult point of economic stabilization” and urged provincial leaders to boost their support for the economy.

“We must consolidate the foundation for economic recovery and development with a sense of urgency that cannot wait,” he said.

Other companies have also taken a hit, notably e-commerce giant Alibaba, which said it had seen no sales growth in its most recent update for investors, a first for the company.

Tencent has enjoyed a long run of rapid growth.

Now the country’s most valuable public company, it is known for its WeChat messaging service and roster of online games.

About half of its revenue comes from online advertising, financial and business services, where the effects of the wider downturn were evident, with revenue gains from cloud and other offerings slowing sharply, while ad sales plunged 18%.

The firm has faced challenges since China last year tightened restrictions on children’s game playing and halted approvals of new games. While those approvals have resumed, Tencent has yet to see one of its games given a green light, forcing it to rely on older titles.

Gaming revenue was down 1% in China and in its international markets, “due to industry-wide normalisation in user spending on mobile games post-COVID”, the company said in a presentation.

The firm said it had shut down online education, e-commerce and game live streaming units. The layoffs in the quarter affected about 5% of its total workforce.

“During the second quarter, we actively exited noncore businesses, tightened our marketing spending, and trimmed operating expenses,” Tencent boss Ma Huateng, known as Pony Ma, said.

He added that the firm was focused on “enhancing the efficiency” of its businesses and well positioned once the Chinese economy starts to recover.

Overall revenue was 134bn yuan ($19.8 billion) compared to the year before, while profits plunged by 56 percent to 18.6bn yuan.

But Tencent promised a return to growth even if the economy stayed weak.

The tech giant’s President Martin Lau noted on a post-earnings call that China had issued no new regulation this year that was materially detrimental to the industry. He added that he expects Wechat’s video accounts – a short-video rival to ByteDance’s Tiktok – to boost advertisement sales and become a big revenue driver.

“We believe with those three sets of initiatives taken together, we can return the business to year on year earnings growth, even if the macro environment remains as it is today,” said Tencent’s Chief Strategy Officer James Mitchell.

In the Igbo Nation, elders will say “a chuo aja ma ahughi udele, mara na ihe mere na ebe ndi mmuo [if you make an animal sacrifice to the gods, and no vulture shows up, you can conclude that something happened in the land of the spirits]. Indeed, for you to kill an animal and present it at the altar to the gods, and no vulture shows up, afterwards, to eat the animal, you have a black swan – an uncommon occurrence.

Late Wednesday, BBC Radio reported on the strike of electricity workers in Nigeria. That was the first time I knew that electricity sector workers were going to strike or already striking. I mean, how could such a thing be about to happen and the media did not flood the social-sphere with it?

Possibly, people felt that there was no difference whether the workers were working or striking as Nigerians were going to get the same outcome: darkness. But it should not be so: shutting down a national grid should be like a black swan or indifference of vultures to animal sacrifices.

I am happy the workers have suspended the strike: “The National Union of Electricity Employees (NUEE) has suspended its nationwide strike for two weeks…The union’s strike on Wednesday left cities and towns across Nigeria in darkness after workers shut down power stations. The workers are complaining about welfare issues.” Now, at least, we can pay them to produce official darkness. And that is a better outcome! Sure, I agree, it is not all their faults.

Blame Nigeria which continues to find electrons to light homes, a problem solved more than a century ago in many places.