The Country Manager for OPay in Nigeria, Iniabasi Akpan has said traditional banks should be worried about the fintechs and telecommunications companies granted approval by the Central Bank of Nigeria (CBN) to operate in the financial market.
Akpan said the traditional banks, which are not innovative in their operations in the financial market, would not stand a chance against the likes of OPay and other Payment Service Banks (PSBs) being employed by the CBN to drive financial inclusion in Nigeria.
Since the CBN began to seek alternative channels to serve the underbanked population and drive financial inclusion in the country to 80% next year, the spotlight has been on how valuable banks will be to Nigerians years from now.
More financial and payment services that are not bank-led have continued to make their way into the financial market. The latest driver of the tech onslaught against the traditional banks is OPay which is an interconnected system harbouring payment for local canteens, motorcycle (okada), bus drivers and other bills payment, as well as enabling transfer and receiving of funds.
OPay is the parent company of ORide, OBus and OFood.
Akpan, during an interview with Nairametrics, said banks that don’t seek collaborative ways and are not innovative in their approach will have challenges as the financial market continues to expand.
“Banks that are not innovative should worry. It’s not just about OPay. The fact is that it’s coming.
“The traditional banks that don’t find a collaborative way and are not innovative are going to have serious challenges in the market.
“It’s not just us. The PSBs (payment service banks) are coming. So telcos who are going to hit the market too. So any traditional bank who are thinking it’s going to be business as usual, they have something coming.”
Akpan is not alone: In August 2019, the United State’s rating agency, Moody’s reported that commercial banks might soon lose their services to the growing popularity of Fintechs firms.
Moody’s said the operation of banks would be affected by Fintechs and Mobile Network Providers due to their lack of infrastructure to rival new web payment solutions.
To back up these projections, some banks are beginning to wind up their brick and mortar operation to respond to the advancement in technology as the need to visit banks begin to dwindle among customers affecting retail banking.
MTN Nigeria has already begun its mobile money service with the launch of MoMo. Airtel has also begun its own mobile money service in other African countries and is reportedly considering establishing the same service in Nigeria.
3 startups to get N3 million grant each in the COVID-19 virtual hackathon
The hackathon hopes to identify accessible and cost-effective E-Learning solutions for public schools.
The Nigerian Communications Commission has announced that 3 finalist startups will get a grant of N3 million each at the end of the COVID-19 virtual hackathon.
These three startups will be selected from submitted entries that meet all the criteria and provide adaptable digital solutions for addressing the present and future impacts of pandemic and epidemic diseases.
The solutions must be novel, clearly explained, with proof of concept
NCC announced this through a statement published on its Twitter handle.
The grant, it said, will enable the three startups with the most promising digital solutions to produce a prototype within 2 months of receipt.
According to the statement, submitted entries are expected to provide solutions in sectors such as health, digital communications, education, transportation.
For those in health, the solutions should find a way to empower frontline healthcare workers or prevent, trace, and contain the spread in Nigeria.
Solutions in digital communications are expected to aid the sustenance of economic activities and people-to-people communication while encouraging social distancing without compromising productivity.
The hackathon also hopes to identify accessible and cost-effective E-Learning solutions for public schools, as well as improved safety measures in public transportation in Nigeria.
Interested tech hubs, startups and innovative digital SMEs can still submit entries on or before July 17, 2020.
CBN expands scope of regional banks in Nigeria, gives compliance timeframe
The aim of this directive is to expand the reach of the regional banks across the country, the CBN said.
The Central Bank of Nigeria (CBN) has expanded the scope of regional banks in the country, by requiring them to open branches in at least one additional geopolitical zone outside of the existing geopolitical zones where their operating licenses cover.
A circular that was issued earlier this week by the apex bank said this new directive is in accordance with “section 8 (g) of the CBN Scope, Conditions & Minimum Standards for Commercial Banks Regulations no  2010 as revised on September 4, 2019.”
The new directive took effect on Friday, June 26, 2020. In other words, all the regional banks are expected to have become aware of this development since then. They now have a timeframe of six months to establish their presence in the geopolitical zones outside of where they currently operate.
It should be noted that prior to this time, regional banks in the country typically operated in at least two geopolitical zones of the federation. However, in line with the new expansion, the CBN shall now prescribe an additional geopolitical zone for each of these regional banks, thereby making the coverage area three geopolitical zones per regional bank.
Meanwhile, the CBN said the aim of this directive is to expand the reach of the regional banks across the country, whilst ultimately promoting financial inclusion. Note also that the new directive affects all regional banks, both the ones engaged in commercial banking and non-interest banking. Some part of the circular said:
“Effective the date of this circular, all banks with regional authorisation shall be required to operate from one additional geopolitical zone as may be prescribed for each institution by the CBN, without prejudice to the existing requirement of the minimum of two (2) geopolitical zones of the federation. The essence is to promote spread and balance of the regional banks across the country.
“The compliance timeline to establish operational footprint at the advised zone shall not exceed six (6) months from the issuance of the regulatory advice to each regional bank by the CBN.”
Nigerian and US Authorities battle former Enron Nigerian Subsidiary over $80 million Yacht
Both Nigerian and American governments have opposed Enron Nigeria’s appeal.
19 years after the bankruptcy of Enron Corporation, one of the biggest corporate bankruptcies in American history, a former subsidiary of the company is battling Nigerian and American Authorities over the sale of a yacht valued at over $80 million acquired by Nigerian businessman Kolawole Aluko.
The yacht was seized by the US Government in 2018 after prosecutors say it was bought with the proceeds of bribes paid to Nigeria’s former Minister of Petroleum, Diezani Alison–Madueke.
The yacht was later auctioned for $37 million in 2019. The Nigerian government also dropped claims to the proceeds of the sale recently and a Texas Court ordered all proceeds should be retained by the US Government.
However, a former unit of the Bankrupt Enron, Enron Nigeria Power Holdings claims it’s entitled to the proceeds and demands $22 million in a bid to get an arbitration awarded to them against the Nigerian government for suspending a contract signed with Enron in 1999 to build and operate a Power plant.
Enron Nigeria claims the Nigerian government dropped claims to the proceeds of the yacht’s auction in an attempt to fraudulently transfer assets to stop creditors from accessing them. Saying Nigeria dropping its claims was “a recognition of the factual and legal basis” in a DOJ court filing.
Both Nigerian and American governments have opposed Enron Nigeria’s appeal.
Enron Nigeria Power Holdings Ltd is owned by ex-Enron staff involved in the negotiations for the Power Plant contract in Nigeria and was bought out of bankruptcy for $750,000 in 2004 by a Cayman Islands registered company.
An arbitration ruling in 2012 awarded Enron Nigeria Power Holdings $11.2 million including interest in damages against the Nigerian government.
The DOJ says Mr. Aluko bought the yacht for $82 million in 2013 and funded a lavish lifestyle for Alison Madueke in exchange for NNPC contracts valued at over $1.5 billion.
Aluko and his business partner, Olajide Omokore are also accused of laundering illicit revenues into and through the United States