On 6 October 2025, the Central Bank of Nigeria (CBN) released comprehensive guidelines for agent banking operations, signalling a significant evolution in one of Nigeria’s most successful financial inclusion stories. This new directive consolidates all previous regulations into a single document while introducing stricter operational requirements to reshape how millions of Nigerians fundamentally access banking services.
The journey so far: From experiment to economic lifeline
Agent banking in Nigeria began as a modest experiment in 2013 when the CBN first issued guidelines allowing licensed financial institutions to partner with third parties to deliver basic banking services. The concept was both simple and revolutionary: to bring banking to where Nigerians live, work, and shop, rather than expecting them to travel to distant bank branches.
The impact has been transformative. Financial inclusion in Nigeria grew significantly, rising from 56% in 2020 to 64% in 2023, with agent banking serving as a primary driver of this expansion. Today, the familiar sight of Point of Sale (PoS) terminals at corner shops, petrol stations, and markets has become integral to Nigeria’s economic fabric. For millions in remote communities and underserved urban areas, the local agent represents their only meaningful connection to the formal financial system.
The introduction of super agents—institutions licensed by the CBN to develop and manage agent networks—in 2015 further accelerated this growth. This structure allowed banks and fintech companies to rapidly scale their reach without the overhead of direct management, as super agents focused solely on recruiting and managing these networks.
What has changed: The devil in the details
The new guidelines signal the CBN’s intent to professionalise and standardise an industry that has, at times, operated in regulatory grey areas. Several key changes stand out:
Ending Multi-Principal Agency
Perhaps the most controversial change is the mandate that agents must now be exclusive to one principal (bank or fintech) at any given time. Previously, agents commonly operated multiple terminals for different service providers, a practice that allowed them to maximise transaction volumes and income but which has now been outlawed, definitively reducing agents’ earnings.
The ripple effects extend far beyond individual agents. Principals must now compete more aggressively to attract and retain agents, with competition likely focusing on commission structures, technical support quality, liquidity management, and brand strength. Principals are expected to sweeten their offers with higher commissions, faster dispute resolution, better training, and a more robust technology infrastructure.
However, a significant constraint is embedded in the new contract terms. Section 5.4 of the guidelines stipulates that “an Agent is not allowed to be appointed by another Principal (directly or indirectly) until the expiration of any existing Agent Banking Agreement.” This contractual lock-in means that agents who sign with a single principal are bound to that agreement for its entire duration, which could be one, two, or more years.
An agent dissatisfied with their principal’s commission structure or service quality cannot simply switch to a competitor. They must either wait out the contract, negotiate an early termination (with potential penalties), or breach the agreement, which risks blacklisting from the entire agent banking ecosystem. This gives principals significant leverage, potentially dampening the competitive pressure that exclusivity was intended to create. For the principals themselves, exclusivity also translates to reduced transaction volumes and revenues from agents who once served multiple platforms.
Transaction limits and monitoring
The introduction of a daily cash-out limit of ₦1.2 million per agent, combined with individual customer limits of ₦100,000 daily and ₦500,000 weekly, introduces significant constraints that will hit certain agents much harder than others.
In major commercial hubs like Balogun Market, Alaba International Market, and Computer Village in Lagos, where agents serve as the primary banking infrastructure for traders dealing in high-value goods and large cash flows, the ₦1.2 million daily limit becomes an operational straitjacket. For instance, an agent in Alaba Market serving electronics traders who routinely handle transactions of ₦500,000 to ₦2 million for wholesale purchases could exhaust most of their daily capacity by mid-morning with a single large withdrawal. This forces other customers to seek services elsewhere and results in lost income for the agent. The constraints are equally severe in industrial areas, transport hubs, and markets dealing with large volumes of construction materials, automotive parts, or agricultural produce.
In contrast, the limit is largely theoretical for agents in residential neighbourhoods or rural communities where typical transactions involve salary withdrawals, bill payments, and small retail purchases, as they may process 30 transactions daily without approaching the ₦1.2 million threshold.
The individual customer limits compound the problem. A trader needing ₦500,000 to restock inventory must now split the withdrawal across five days (due to the ₦100,000 daily limit) or find five different customers to withdraw cash on their behalf. While workaround-friendly, this practice defeats the purpose of transaction monitoring and opens doors to structured transactions designed to evade detection.
Yet, this constraint may inadvertently accelerate the adoption of digital payments. Traders who previously insisted on cash-only transactions now face a choice: navigate cumbersome withdrawal limits or begin accepting bank transfers directly from suppliers and customers. For a market ecosystem long resistant to digitisation, these limits could prove more effective at driving cashless transactions than years of government advocacy, though the question remains whether this forced digital migration will be embraced or circumvented.
The new guidelines also require that transactions flow through the principal’s dedicated agent accounts. Principals are mandated to electronically report daily transactions, withdrawals, and balances to the Nigeria Inter-Bank Settlement System (NIBSS) and the CBN. Agents operating outside designated accounts would face personal liability for fraud and risk contract termination and blacklisting. The guidelines further mandate that principals monitor “accounts associated with the agents’ Bank Verification Numbers (BVNs) with a view to identifying agent banking activities which may be conducted outside the designated account(s)”.
…to be concluded.
Ayotunde Abiodun is an analyst at SBM Intelligence.
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