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SRJ Agency framework


An approved money transfer services operator may conduct its business through an agency framework, pursuant to Central Bank of Nigeria’s Guidelines on International Money Transfer Services in Nigeria, 2014 (the “Guideline”).

We considered the licencing regime for international money transfer services (“international money transfer services”) in Nigeria, in a preceding article. Generally, no person may carry on international money transfer services without Central Bank of Nigeria’s (the “CBN”) licence.

We are aware that CBN adopts a mid-wife’s approach in regulatory and compliance issues. CBN does not clamp down on non-compliant businesses – especially fin techs – except in the face of fraud.

Here we limit our commentary on the criteria of agency framework in international money transfer services.

Broadly, this implies that CBN has issued international money transfer services licence to money transfer services operator (the “MTSO”), or the MTSO seeks to restructure its business model to include an agency framework.

Agency model in international money transfer services utilize the agent’s infrastructure and resources that include business premises, staff and, technology.

We note that an agent cannot own an international money transfer services’ payment processing platform in Nigeria.

Suitability for Agents

Under the Guideline, an agent must be a financial institution regulated by the CBN. The agent must not be classified as a non-performing borrower within 12 months preceding its proposed appointment.

In deed, a proposed agent must not be listed in any sanction list. It must possess appropriate physical infrastructure and human resources to provide money transfer services. A prior 12 months existence is required.

Conditions for Engagement of an Agent

An MTSO will execute a contract with an agent, and commercial clauses in the contract will include:

  • Affirmation that MSTO is wholly responsible and liable for all actions or omissions of the agent
  • Risk controls such as customers identification and transactions, cash management, cash security, security of agent premises and insurance policies
  • Services to be rendered as well as parties’ rights and duties
  • CBN’s free, unfettered and timely access to any internal systems, documents, reports, records, staff and premises of the agents, in respect of international money transfer services
  • Anti-money laundering and combating the financing of terrorism capability
  • Agent’s responsibility to deliver supporting transaction documents
  • MSTO’s ownership of all transaction data
  • MTSO’s capacity to treat instances of non-compliance by the agent
  • Restriction on agent marking up transaction fees. Business hours of the agent and limits on cash holding by the agent
  • Agent’s remuneration and clear exit strategy.

Additionally, the Guideline requires MTSO to notify CBN each time it appoints an agent and to conduct its business in compliance with all applicable legislation.


Granted, the Guideline, a year 2014 regulations of the CBN appear to favour deposit money banks in Nigeria. The Guideline pre-dates CBN’s Agency Banking Regulations and all other CBN’s regulations, guidelines and directives aimed at promoting financial inclusion.

Our clear view is that agent-bankers are capable of delivering international money transfer services. Given the wide-spread presence of agent-banker otherwise known as agency banking or POS agents, they will further deepen CBN’s financial inclusion agenda if aggressively encouraged to act as agents or sub-agents or sole agents in respect of international money transfer services.

Osita Enwe heads our Fin Tech, Education law and Agribusiness law practice groups.

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