Mobile money and digital lending will lead growth in the service sector in 2024, the Governor of the Central Bank of Nigeria, Olayemi  Cardoso, has disclosed.

Speaking at the launch of the Nigerian Economic Summit Group 2024 Macroeconomic Outlook Report recently, Cardoso stated that the sector continued to dominate economic growth in the country.

He projected that the country’s economy would grow by 3.76 per cent in 2024, as reliance on fintechs is expected to grow in the year.

He said, “The services sector is expected to maintain its dominance, driven by mobile money adoption, increased government partnerships, and expanded digital lending offerings.

“Continued digitisation and government support for financial inclusion initiatives are poised to drive growth in the fintech sector in 2024.”

The CBN governor noted that various sectors would grow in 2024. He remarked, “Specifically, the positive outlook for industry, services, agriculture, and mining, electricity, gas & water supply sub-sectors reflects the potential effect of market-based reforms through private investment and SMEs-led growth that would contribute to business improvement and confidence.”

This was not the first time the CBN governor had expressed faith in fintech.

Recently, while speaking on Nigeria’s aim to become a $1tn economy, Cardoso listed the fintech industry as one that will attract significant capital investments into the country.

Speaking at the Chartered Institute of Bankers of Nigeria’s annual dinner in 2023, Cardoso said, “Further to the projected growth target, sectors, including agri- processing, oil and gas, manufacturing, solid minerals, fintech and information technology, real estate construction and infrastructure, among others are expected to attract significant capital investments.”

Despite his optimism about this sector, Cardoso had also declared the CBN’s intention to be stricter on regulatory compliance.

At the CIBN event, the governor stated, “Technology will continue to play a critical role in delivering financial services and enhancing financial inclusion.

“However, recent developments in the payment services landscape have raised concerns regarding the use of technology and the existing licensing and regulatory framework.

“We have observed that some licensees are operating outside the approved activities, breaching the boundaries set for them. Any intentional or unintended non- compliance will be subject to sanctions, as operators have the responsibility to ensure that they are licensed for the activities they undertake.”

According to the CBN governor, the apex bank will engage in extensive consultations to develop a new regulatory and compliance framework that is suitable for the technology-driven payment services sector, as it concurrently conducts a comprehensive review of the licensing framework for payment services.

The growth of mobile money has been on the ascendancy in recent years in the country, especially with the CBN favouring a more cashless economy.

Mobile money account ownership grew to 22 per cent in 2022, according to GSMA. Mobile money transactions grew to $832bn in Nigeria and other Sub-Saharan African countries in 2022.

Commenting on the growth, GSMA said, “The number of mobile money agents grew from 12 million in 2021 to around 17 million in 2022 – a staggering 41 per cent year-on-year increase.

“Much of this growth was in Nigeria where a liberalised regulatory regime has led to an increase in MMPs. Agents are an important part of any mobile network service and were responsible for two-thirds of all cash-in transactions in 2022.”

Also, more Nigerians are embracing digital lending, especially with rising economic challenges.

There are 211 digital lenders licensed to operate in Nigeria, according to the Federal Competition and Consumer Protection Commission.

The post Digital lending will enhance service sector growth – CBN appeared first on Tech Digest News.

TECHDIGEST – Following the expiration of the 3-day ultimatum by the Central Bank of Kenya (CBK), 10 digital lenders in Kenya have now been officially licensed to operate in the country. The 10 emerged from a pool of 288 applicants who were directed to submit all required documents to aid the CBK’s licensing review process. Other digital lenders that missed the application deadline have been directed to cease their operations immediately.

Earlier in March, Kenya’s apex bank announced a new set of regulations to guide the licensing and oversight of digital lending providers (DCPs) in the country.

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Two months later, the CBK issued an official reminder to these lenders, urging them to apply for licensing as that would determine their continued eligibility in the country.

Today, two days since the ultimatum’s deadline elapsed, CBK announced that 10 digital lending companies have received their operating licenses. These are CeresTech Limited, Getcash Capital Limited, Giando Africa Limited (trading as Flash Credit Africa), Jijenge Credit Limited, Kweli Smart Solutions Limited, Mwanzo Credit Limited, MyWagepay Limited, Rewot Ciro Limited, Sevi Innovation Limited and Sokohela Limited. 

Following the release of the list, Tala, a popular digital lender in Kenya with millions of users, issued a press release calming its customers that it was still in business and is currently in the process of obtaining its license.

Kenya gives digital lenders a 3-day ultimatum to comply with new regulations

One of the provisions of the new regulations is increased confidentiality for borrowers. Digital lenders are now barred from sharing customers’ information with all kinds of third parties—including credit reference bureaus—without prior consent from the customer. They are also expected to operate at least one physical office in the country.

A noteworthy feature of the new regulations is that they protect Kenyans from the threats, profane language, violence and other abusive practices widely used in debt collection.

However, contrary to previous speculations, the new regulations do not enforce a cap on interest rates, except for loans classified as non-performing. 

With this move, the CBK is doing for Kenya what most data protection bodies—like Nigeria’s NITDA— are struggling to do in other African countries.

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