E-Financial
Policy, Regulation Should Bolster Innovation To Ensure Financial Inclusion Is Achieved
By Daniel Monehin
Walk through bustling marketplaces in Africa and you will see a substantial amount of money changing hands, as merchants and consumers haggle over the goods and services. What stands out is just how many of these transactions are conducted using cash, and the reason for this is because most people don’t believe they have any other pragmatic option.
There is a large number of unbanked or underbanked people on the continent, and so many individuals that don’t save or have a financial history with a formal financial institution and are therefore found on the fringes of financial services – where most transactions are carried out with cash. What this typically creates is a vicious cycle that serves to prevent most of these individuals from accessing critical financial services to better manage their finances, grow their businesses or protect themselves against eventualities.
Financial inclusion remains a challenge, particularly in developing countries. Only just over 30 percent of Sub-Saharan Africans, for instance, have any formal account. There is a collective focus by both the private and public sector on the need to find ways to bring greater numbers of people into the financial mainstream and improve their livelihoods.
One of the areas that has the greatest potential to narrow the margin of exclusion is policy and regulations. Policy surrounding financial inclusion has garnered considerable attention in the last few years, as the importance of inclusion has been aligned with financial integrity, stability and literacy.
Policy makers face the ultimate juggling act as regulatory frameworks and policies need to find the balance between providing the necessary support that will bring citizens into the formal financial fold while simultaneously ensuring that these requirements do not discourage access to critical financial services by stifling individuals’ abilities to transact.
What is clear is that it is simply impossible to make tangible progress by working in isolation. It takes collaboration between players in both the public and private sectors to bring their specific area of expertise to the table with the view to develop holistic strategies and policies that will enable inclusion.
The good news is that industry stakeholders across the board have largely realised this and joined forces through organisations like the Alliance for Financial Inclusion (AFI) to share knowledge and engage to formulate and implement these policies. AFI is led by its members, comprising mainly financial regulatory institutions such as Central Banks, superintendence’s and Ministries of Finance from developing countries. The network currently includes members from 94 countries working together to accelerate the adoption of proven and innovative financial inclusion policy solutions with the ultimate aim of making financial services more accessible to the world’s unbanked. Mastercard is a proud member of AFI and continues to collaborate to ensure open dialogue with focus on building a strong network where solutions can be found.
What has made these platforms so impactful is that the regulators and policy makers understand the unique African context and have been formulating policy solutions that speak to this. Advancing financial inclusion through digital financial services, for example, has been a top priority and continues to dominate the agenda because of the role that mobile money, new tech and innovation are playing in allowing Africans to pay for goods and services safely and easily.
Although mobile money is a global disruptor, its impact has been especially noticeable in Africa, where mobile penetration continues to grow and where it has already proven to be a game changer in terms of providing affordable financial services.
Using a tool that people already hold in their hands means that more people can be connected to an interoperable financial ecosystem at a fraction of the cost – backing this up is the fact that there are nearly 280 million registered mobile money accounts in Sub-Saharan Africa, compared to 178 million bank accounts.
As such, driving policy that supports mobile-based payments as a critical enabler will remain a core focus going forward. But even with mobile and digital finance recognised as an answer of sorts to facilitating financial inclusion, that is only half the battle. There needs to be continuous innovation and advancement in this space to ensure that all Africans have the opportunity to be financially included – and the answer lies in collaboration across the public and private sectors to leverage each other’s strengths.
Federal High Court in Lagos has fixed July 1, 2025, for the commencement of trial in a money laundering case involving Cititrust Holdings PLC and three of its subsidiaries.
The subsidiaries are Cititrust Funding PLC, Cititrust Credit Limited and Cititrust Financial Services Limited,
The companies are facing an eight-count charge filed by a team of prosecutors from the Economic and Financial Crimes Commission (EFCC), comprising Anasoh Henry Onyekachi, Frankklin Ofoma, Abdulhamid Lamido Tukur, and A.A. Usman.
According to the charge, between 2021 and 2023, the companies, all incorporated in Nigeria, allegedly operated investment management services without a valid licence from the Central Bank of Nigeria (CBN).
This act contravenes Section 57 of the Banks and Other Financial Institutions Act (BOFIA) 2020 and is punishable under Section 57(5) of the same legislation.
The prosecution also alleged that the companies conducted a Collective Investment Scheme without registering with the Securities and Exchange Commission (SEC), another violation of regulatory requirements.
In one of the counts, Cititrust Credit Limited is specifically accused of failing to report high-value financial transactions to the Nigerian Financial Intelligence Unit (NFIU).
These transactions include a N20 million transfer on January 7, 2021; a N200 million transfer on April 4, 2021; and a N200 million lodgement on January 29, 2021.
Additionally, both Cititrust Credit Limited and Cititrust Financial Services Limited are alleged to have made a single transfer and lodgement respectively of N42 million into their bank accounts on January 29, 2021, without proper disclosure to relevant authorities.
The alleged offences are in breach of Sections 11(1)(b) and 11(3) of the Money Laundering (Prohibition) Act 2022, as well as Section 54(1) of the Investment and Securities Act 2007, and are punishable under the respective laws.
The court is expected to begin full proceedings on July 1.
Ecobank Nigeria’s long-term issuer credit rating has been downgraded to ‘CCC-’ from CCC, with the outlook placed at negative by S&P Global Ratings. This is a resultant effect of the $150 million bond buyback offer on the bank’s $300 million Senior Unsecured Eurobond.
Part of the tender offer made by Ecobank includes an early tender premium of $12.50 for every $1,000 in principal (equivalent to 1.25%), with the anticipated settlement date set for July 8, 2025. The offer also requests bondholders’ consent to eliminate the capital adequacy covenant on the outstanding notes.
These actions also led S&P to downgrade the $300 million Eurobond from ‘CCC’ to ‘CCC-’. Although S&P notes that it does not consider the tender offer a distressed debt restructuring.
However, this assessment is at risk of changing if the bank does not receive the promised capital injection from the parent group, Ecobank Transnational Incorporated (ETI).
Following the naira devaluation, Ecobank was unable to meet the regulatory Capital Adequacy Ratio (CAR) requirement, as its CAR dropped to 7 per cent. This was below the 10 percent regulatory minimum. The breach of the CAR caused the bank to seek the consent of its bondholders to pause the capital adequacy notes on the Eurobond notes till September 2025.
Following this development, the bank received a $50 million prepayment on promissory notes from its parent company, ETI, along with early repayments on certain foreign currency loans. However, it has been insufficient in restoring the capital adequacy to regulatory levels.
According to S&P, the bank is expected to receive another $50 million capital injection from its parent group before August 2025. However, the ratings agency notes that if the bank is unable to receive this capital injection, it will inevitably default on its bonds. A situation that would cause a further downgrade to ‘CC’.
It was recommended that Ecobank Nigeria consider raising $150 million through additional Tier-1 instruments to strengthen its liquidity buffers. Additionally, the bank was advised to intensify efforts to recover its foreign currency-denominated loans.
Sofri, Powered by Links Microfinance Bank plans a massive rollout of Point of Sale, PoS terminals for merchants and agency banking in the third quarter of this year.
This is coming against the backdrop of the banks revamp of its digital platforms to support better customer experience.
Paul Adebayo, managing director, Sofri, said the bank is technology and purpose-driven, with focus on financial inclusion and sustainability. As well with the determination of making banking simpler, inclusive, and impactful.
He said that the revamped mobile app features, faster onboarding, cleaner interface, real-time alerts, enhanced security and seamless loan applications.
“Our corporate internet banking Launched for SMEs and institutional clients features, secure payments, transfers, account management and enhances business banking experience.
“Laying the groundwork for greater reliability, product innovation and operational efficiency is our new core banking infrastructure. This change enables us to scale faster and serve customers better.
“Our Terminal Management System (TMS) improves the performance, uptime, and remote monitoring of our POS terminals. This ensures merchants and field agents enjoy better stability, quicker settlements, and stronger support,” he added.
On sustainability impact, Adebayo, added that Sofri is embedding ESG principles into its lending and operational models — from offering green financing options, to supporting waste-to-wealth entrepreneurs, and making inclusive finance part of Nigeria’s circular economy.
Sofri is a trademark of Links Microfinance Limited (Links Mfb). Links Mfb is licensed and regulated by Central Bank of Nigeria (CBN) and deposits insured by the Nigeria Deposit Insurance Corporation (NDIC). Links Mfb is a member of DLM Capital Group, owners of DLM Asset Management as regulated by the Securities and Exchange Commission (SEC).
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