In furtherance of efforts to liberalise the Foreign Exchange Market, ensure liquidity and make foreign exchange more readily available to low end users, the Central Bank of Nigeria (CBN) has licensed Flutterwave, Pagatech, Interswitch and e-Tranzact as International Money Transfer Operators IMTOs.
The apex bank BN last week released the list of 60 firms approved as International Money Transfer Operators (IMTOs) to render international money transfer services.
Other notable firms on the list include Moneygram, Western Union, Worldremit, Western Union, swift Payment Limited, Paypal Inc, Homesend, Ria Financial and WiPay Global.
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Deposit Money Banks are prohibited from operating as IMTO but can serve as agents to the operators.
The international remittance markets have grown significantly in Nigeria, with major contributions to investments and commerce. Nigeria’s diaspora annual remittance in the range of $21 billion is considered the largest in Africa and projected to hit $41 billion in 2016.
Even though the Nigerian money transfer business was liberalized since 2002, the international money transfer market in Nigeria before 2008 was largely controlled by Western Union and MoneyGram, by the use of exclusivity agreements which gave them an almost monopolistic hold over the market.
In 2007 the World Bank published the General Principles for International Remittance Services, whereby the use of exclusivity as a condition for offering remittance services was discouraged.
In 2008 the Central Bank of Nigeria (CBN), through its Directive BSD/DIR/CIR/GEN/VOL 2/017prohibited all banks from signing exclusivity clauses with international money transfer operators (IMTOs) and ordered a review of all existing agreements to expunge such clauses on the basis that it restrains competition and increases the cost of money transfer services to end users