Godwin Emefiele’s first five years as Central Bank of Nigeria (CBN) governor saw major progress made in terms of guidelines for electronic payment and digital banking services in Nigeria. There were about 20 guidelines and circulars issued under his watch which in various ways impacted payment electronic services in the country.
Some of the regulatory guidelines issued under him include the Exposure Draft of the Guidelines on Instant (Inter-bank) Electronic Funds Transfer Services in Nigeria; Sanctions on Erring Banks e-Payments Service Providers for infractions of Payments System Rules and Regulations; The Circular on the Regulatory Framework for the Use of Unstructured Supplementary Service Data (USSD) in the Nigerian Financial System; Circular on the Exposure Draft of New CBN Licensing Regime (License Tering) for Payment System Providers; and Exposure Draft for the Operation of Indirect Participants in the Payments System among other guidelines.
Although Emefiele’s CBN on a few occasions appeared proactive, many of the times it was reactionary. There was also the sense by stakeholders in the payment space, that Emefiele’s guidelines was made to protect Nigerian banks against the new players – fintech firms. The guidelines on different occasions rubbed off the wrong way on fintech startups because of stringent capital requirements.
Emefiele’s protectionist guidelines may be understood on the premise of previous assumptions that fintech startups represented existential threats to banks. However, time has since put those assumptions to bed and it has shown that banks and fintech firms can exist alongside and even complement each other. Thus, Emefiele has nothing to fear from fintech firms rather he needs them to ensure his second-coming ends on a high note.
For instance, the cashless Nigeria project which aims to drive development and modernization of payment system in line with Nigeria’s vision 2020 goal of being among the top 20 economies by the year 2020, depends more on the success of these firms than the banks. With barely one year left to make that dream a reality, Emefiele will do well to prioritise creating an enabling environment where fintech firms will thrive, in order to drive financial inclusion.
