In our February 3, 2020 article, we had written on the differences between a Mobile Money Operator (MMO) license, a Payment Service Bank (PSB) license and a Microfinance Bank (MFB) license. The article was aimed at supporting Fintechs in determining which of the existing Central Bank of Nigeria (CBN) licenses is compatible with their services or proposed products.
MMOPSBMFBMinimum share capital NGN 2 billionNGN 5 billion
Unit (Tier 1) – NGN 200 million
Unit (Tier 2) – NGN 50 million
State MFB – NGN 1 billion
National MFB – NGN 5 billion
Service AreaNo restriction25% of its operations in Rural Areas
Unit (Tier 1) – operating in urban areas with 5 offices in 5 Local Government Areas (LGAs).
Unit (Tier 2) – operating in rural areas with two branches in 1 LGA.
State – operating in one state.
National – operating in all the states.
LoanNot permittedNot permitted
Permitted provided that:
• No single loan will exceed 1% of the
sharecapital of the MFB; and
• subject to 80% Micro loan of the total loan portfolio.*Micro loans are credit facilities not more than NGN 500,000 for Unit
(Tier 1) and NGN 1 million for other categories.
Bank accounts and Wallets
Bank Account-Based
Card Account-Based (Credit, Debit and Pre-paid)
e-Wallet
Account and e-WalletsBank accountsCardsLimited to card processingDebit and Pre-paid cardsDebit and Credit cardsTransaction limit
Depending on KYC level:
level 1 – NGN 50,000 (balance of NGN 300,000)
level 2 – NGN 200,000 (balance of NGN 500,000)
level 3 – NGN 5,000,000 (unlimited balance)
Depending on KYC level:
level 1 – NGN 50,000 (balance of NGN 300,000)
level 2 – NGN 200,000 (balance of NGN 500,000)
level 3 – NGN 5,000,000 (unlimited balance)
No LimitForeign Currency transactionCan receive and sell foreign exchange from inbound transfer.
Prohibited from remittance.
Can receive and sell foreign exchange from inbound transfer.
Prohibited from remittance.
Prohibited from foreign exchange transactionsAirtime and USSD service Permitted (subject to NCC approval)Permitted (subject to NCC approval)Permitted (subject to NCC approval)QR Code PaymentsPermittedPermittedPermittedConnection with the Nigeria Inter-bank Settlement System
(NIBSS)
RequiredRequiredRequiredConnection with the
CBN Real Time Gross
Settlement (RTGS)RequiredNot requiredNot requiredAgent BankingPermittedPermittedPermittedWho can OperateExisting Banks and any
company can apply for an MMO license.Limited to the types of companies
listed below:Banking AgentsTelecommunication companiesRetail chainsPostal Service and Courier CompaniesMMO (converting to PSB)Switching Companies
Financial Technology companies
Financial Holding companies
Any company can apply for an MFB license.
Since our article, the CBN has issued various regulations and policies affecting MMOs, MFBs and PSBs. In view of this, we have updated our table on the different licenses to reflect the regulatory update.
If you require clarity or further information on the licenses above, contact Pavestones at info@pavestoneslegal.com.
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Read the original publication at Pavestones
