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Most Nigerians are already familiar with Quick Loan Apps and their unsolicited messages asking you to borrow from them with fewer hassles and within hours. The other spectrum of this technologically driven businesses is saving and investments.

Perhaps not as aggressive as their money lending counterparts, these FinTech firms thrive by earning a spread between the amount they pay depositors and the interest they earn when they invest their money. More often than not, the money is invested in risk-free mouth-watering securities such as treasury bills and well, you guessed right, the now forbidden OMO bills.

Last week, the CBN issued circular restricting trading of its OMO bills to only banks and foreign investors. This restriction restricts Pension Funds, Insurance Companies, Asset Managers and FinTechs from buying or selling OMO bills in both the primary and secondary markets.

For these FinTechs to continue to earn the spread, they will have to rely on the soon to be crowded treasury bills and not so mouth-watering fixes deposits. Unfortunately, these instruments don’t offer as many yields as OMO and the volumes are also nowhere close. To make matters worse, some analysts already predict an interest rate crash in the risk-free fixed income space largely dominated by treasury bills.

What are their options? Corporate bonds will probably be the new bride in town. Just that they are not risk-free and are often unsubordinated (without collateral). It is also quite likely that their interest rates could fall as investors search for alternative investments.

What about my money? Depositors with FinTech companies probably need not panic at the moment.  However, they will be foolhardy not to be more circumspect at selecting who they save their money with.



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