Central Bank of Nigeria approves first super agent banking licenses

To enhance financial inclusion in Nigeria, the Central Bank of Nigeria (CBN) has granted an approval-in-principle to two companies—Innovectives Limited and Interswitch Financial Inclusion Services Limited—to operate as super agents in the financial services system.

In 2015, the CBN issued the “Licensing Framework for Super Agents” to encourage other infrastructure providers and operators, including telcos, to provide shared agent network services. This is expected to rapidly expand financial inclusion touchpoints and extend digital financial services across the country.

Innovectives specializes in mobile and electronic payments consulting, payment applications, smart card solutions, payment networks and the integration of financial transaction processing.

Interswitch Financial Inclusion Services Limited is a subsidiary of Interswitch Ltd, an integrated payment and transaction processing company that provides technology integration, advisory services, transaction processing and payment infrastructure to the government, banks and corporate entities. Through its ‘Super Switch’, it provides online, real-time transaction switching for businesses and payment channels, such as automated teller machines (ATMs), point of sale (PoS) terminals, mobile phones, kiosks, web and bank branches.

With approval under the framework, the companies can leverage the Nigerian Inter-Bank Settlement System (NIBSS) switching infrastructure to enable the inter-scheme “Cash-In-Cash-Out” at all their agent locations. The companies and their partners are expected to deploy, operate and manage robust, efficient and interoperable agency banking and mobile financial payment networks, with selected retail outlets operating as agents under the framework, as approved by the CBN.

Under the CBN’s regulatory framework, super agents are responsible for monitoring and supervising the activities of agents, including the volume and value of transactions for each type of service they offer. The framework also states that the volume and value of transactions should be made available to the principal financial institutions, which monitor compliance with the set limits, establish other prudential measures, and take actions such as on-site visits to ensure agents are strictly complying with the requirements of the law, guidelines and contract.

Approval is not transferable and is valid for six months, after which a performance review is conducted to determine whether the super agent should be awarded a full license. As more super agents are licensed, agency banking through banks and mobile money operators will already be operating at full throttle, as an established agent network of other providers, including telcos, will be serving as financial touchpoints. This will make financial services more accessible to low-income populations.