The one thing Fintech has made possible to the point of almost seeming casual is the surprisingly rapid movement of money across the globe. International remittances and transfers have come a long way since the era of money transfers that typically took up to a week and many frustrating due diligence checks.
International money transfer services (as well as international mobile money transfer services) have proven to be a lifeline for Nigeria in general and the Nigerian Fintech ecosystem in particular, with some reports trust foreign currency remittances to Nigeria at $25 billion a year!
However, the regulatory framework governing international money transfer services is as comprehensive as ever, which is why this article will specifically address the following topics:-
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– The regulatory framework governing international money transfer services in Nigeria.
– Licensing requirements for International Money Transfer Service (IMTO) Operators in Nigeria.
– The full scope of permitted and unauthorized activities for international money transfer service companies in Nigeria.
What is the Regulatory Frame governing International Silver To 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 Transfer Services of International Funds in Nigeria 2014 (or “the IMTO Guidelines”).
What are the permit and not allowed Activities declared for International Silver To transfer Service companies below the IMTO Guidelines?
IMTOs are allowed to:-
– Accepting funds for the purpose of transmitting them to a person residing in Nigeria or another country.
– Rendering cross-border personal money transfer services such as money transfers towards family maintenance and money transfer services for foreign tourists visiting Nigeria.
– Perform cross-border money transfers between individuals only.
IMTOs are not allowed to:-
– Engage in money transfers between individuals and legal entities (based on anti-money laundering (AML/CFT) requirements).
– Engage in lending money.
– Act as an authorized dealer in precious metals.
– Commit to accepting monetary deposits as a service.
– Engage in keeping the current accounts of its customers.
– Establish letters of credit.
– Act as custodian of funds for clients.
– Engage in institutional transfers.
– Buy currencies on the national foreign exchange market for settlement.
What are the Licence terms for IMTO?
To secure an IMTO license you need to do the following:-
– submit an application prepared by your solicitor to the Office of the Director of Commerce and Trade Department of the Central Bank of Nigeria with the following attachments-
a). a resolution from 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);
vs). a documented copy of your company’s shareholding structure;
D). Company Affairs Commission (CAC) statutory forms on the allotment of shares and contact details for your company’s directors;
e). profiles of your company’s board of directors and management, including their resumes, email addresses and functional numbers, as well as the ownership, governance and management structure of the company;
F). the organization chart of your company;
g). your company’s business plan;
h). your company’s IT policy;
I). your company’s enterprise risk management framework;
j). contingency and disaster recovery plan;
k). credit reports from an approved credit bureau for shareholders and key management of IMTO;
I). a 3-year tax clearance certificate;
m). your project deployment plan;
not). a non-refundable application fee of Naira 500,000 payable to the Central Bank of Nigeria;
o). evidence of meeting the minimum paid-up capital requirement of N2 billion for Nigerian companies and N50 million for foreign companies backed by a guarantee from the parent company based overseas;
p). proof of presence in at least 7 countries;
q). a letter of no objection from the Central Bank of Nigeria when an applicant for an IMTO license wishes to engage in partnership with a foreign technical partner to start a global or regional money transfer service, in addition to which he must have proof of foreign technical partner have a minimum net worth of $1 million, be a licensed and registered entity in their home country, and have evidence of a strong track record in the field of money transfer services .
Are the legit manners of carry out International Silver Assess to transfer services in Nigeria without the use of a IMTO Licence for smaller fintech companies unable at afford the Licence costs?
Yes there is. You will need to consult your lawyer to find out what options are available to you.
Conclusion :- We hope that a basic understanding of how IMTOs work has been gained with this article. This article is not exhaustive, however, so you will need additional advice from qualified professionals if you plan to venture into this business in the future.