The federal government should play the role of a catalyst in order to encourage innovation, Managing Director and co-founder of KiaKia, peer-to-peer lending firm, Olajide Abiola has said.
Speaking in an exclusive interview with financial technology, Abiola asked government to act as the “driver and catalyst for innovation” in the mobile money operation, as strict regulations have contributed to stifle innovation.
He said, for this reason, financial inclusion has continued to be a mirage to those yet to be captured in the banking system.
He therefore advised government to be creative in its fund disbursement “entrepreneurs and innovators”, adding that government should be proactive and review legislation and regulation in order to “support and encourage operators” in the industry.
Commenting on the licensing regime for peer-to-peer operators, he said banking, deposit, micro lending, payment processing and financial inclusion are within the regulatory purview of the Central Bank of Nigeria [CBN].
“But lending is within the executive and legislative purview of the state. That is why each state has Moneylending Act and different states have different level of modernization”.
He informed that a registered lending platform in Lagos have the liberty to serve customers in other parts of the country through the application of technology.
“You don’t need multiple licenses to reach borrowers in other states of the country. As long you don’t open a physical shop like sales and admin. It is just like e-commerce firm based in Lagos and selling to people in any part of the country. The same thing applies to the bank as well, where you need different type of licences such as unit licensing, state, and national licenses”.
He credited Lagos, Kwara and Oyo states as having the most modern Moneylending regulation. These states have subjected the legislations to re-enactment over the years while other states still operate the colonial-era format without “undergoing reform”.
As a moneylender, he stated, “we do not accept deposits. There are guidelines to this effect which we must adhere”, he concluded.