The Central Bank of Nigeria (CBN) has awarded an International Money Transfer Operator (IMTO) license to Currenzo, the Nigerian subsidiary of Africhange, a global financial institution focused on remittance solutions. This move enables Africhange, through Currenzo, to conduct direct remittance transfers into Nigeria without relying on intermediaries, potentially providing faster, more affordable services to Nigerians both at home and abroad. The license also empowers Currenzo to establish partnerships with local Nigerian banks, streamlining the transfer process, minimizing costs, and providing secure, reliable transactions.
A Major Step for Africhange and Currenzo: Expanding Financial Access
The IMTO license is a significant development for Africhange, enabling it to enhance remittance options for the Nigerian market. Through this authorization, Currenzo is able to form partnerships directly with local banks in Nigeria to facilitate more efficient transfer services. Currently, the company has partnered with three Nigerian banks and is actively seeking a reliable settlement partner to secure a smooth transaction process across the country.
Africhange’s use of advanced blockchain mechanics and other financial technology underpins its services, helping to provide low-cost, high-speed remittances, specifically catering to African diaspora communities. With the elimination of third-party intermediaries, users benefit from streamlined payments, better exchange rates, and reduced transfer times, making it easier for individuals to send financial support to loved ones in Nigeria.
David Ajala, CEO of Africhange, noted the broader impact of the new IMTO license: “As an immigrant-founded company, we understand first-hand that sending and receiving money across borders is a key part of daily life for our users, who are immigrants of African descent. Securing the IMTO license allows us to offer a faster, more affordable way for people to support their loved ones back home.”
Supporting Nigerian Diaspora Communities Through Direct Transfers
Founded in 2020, Africhange has quickly established itself as a global financial player, boasting over 200,000 users worldwide and completing more than 2 million transactions across 100 countries, including Nigeria, Canada, Australia, and the United Kingdom. Offering a diverse range of currencies for cross-border transactions, Africhange has built a reputation for affordable, seamless transfer services. Ajala highlighted that this IMTO license represents a new era for Africhange in terms of empowering both individuals and businesses to make secure, direct transactions in Nigeria.
Africhange recently expanded its reach by entering the UK market in July 2024, leveraging its licenses obtained in Canada, with future expansion plans set for the U.S. and the European Union. These efforts aim to solidify Africhange’s foothold in the international remittance sector and broaden its support for the African diaspora.
Nigeria’s Changing IMTO Landscape: A New Regulatory Push
The CBN’s decision to grant the IMTO license to Currenzo is part of a broader initiative to bolster remittance flows and boost Nigeria’s foreign exchange reserves. The government’s proactive measures seek to capitalize on the diaspora’s significant contribution to the Nigerian economy, with remittances representing nearly 38% of total inflows for sub-Saharan Africa in 2023.
In response to a reported 6.28% decline in foreign exchange remittances during Q1 2024, the CBN granted preliminary approval to 14 IMTOs in May 2024 to increase international transfer options. In an additional effort to drive foreign exchange remittances, the CBN raised the IMTO licensing application fee from ₦500,000 to ₦10 million for Nigerian firms, and from $100,000 to $1 million for international applicants. This increase reflects the government’s focus on attracting credible, high-impact operators who can enhance the overall remittance ecosystem in Nigeria.
Granting Access to Naira Liquidity: A Strategic Move by CBN
In July 2024, the CBN issued a circular granting IMTOs access to naira liquidity through the official window, a measure aimed at bolstering remittance inflows from the diaspora. This strategic initiative enhances liquidity and encourages investments from Nigerians abroad, many of whom are eager to invest back home. The new framework, part of the government’s efforts to enhance foreign exchange availability, is expected to attract more diaspora investments, ultimately contributing to Nigeria’s economic growth and development.
Addressing Business Challenges in a Fluctuating Economy
Despite these advancements in the financial sector, Nigerian startups and businesses continue to grapple with the persistent instability in the country’s power grid, which has seen repeated collapses in recent months. The resulting blackouts, coupled with high operational costs, place an added strain on businesses, forcing many to depend on expensive generator power to keep operations running. The impact of this unreliable energy supply is especially felt by small and medium enterprises, which often operate on thin margins and face hurdles in maintaining steady productivity during prolonged power outages.
While the CBN’s initiatives to enhance remittance flows represent a positive step toward economic stability, addressing core infrastructure issues, such as consistent power supply, remains crucial to creating a more conducive environment for business growth. The Nigerian government’s actions in the remittance space demonstrate a commitment to maximizing foreign exchange earnings through diaspora contributions; however, the ongoing need for reliable infrastructure emphasizes the importance of a multifaceted approach to sustainable economic development.
Looking Ahead: A Future of Growth and Resilience
The CBN’s ongoing regulatory adjustments, including raising IMTO fees and granting access to the official naira liquidity window, are designed to streamline remittance channels and drive foreign investment. As Currenzo begins operations under its new IMTO license, Nigerians can look forward to faster, more reliable remittance services that provide tangible support to families and small businesses across the nation. With expanded access to funds from the diaspora, Nigeria has a unique opportunity to fortify its economy, provided these financial initiatives are supported by equally robust infrastructure improvements.
In a time of economic challenges and resource constraints, the recent license granted to Currenzo symbolizes a larger effort by the CBN to leverage Nigeria’s diaspora community as a key economic asset. By working together, financial institutions and regulatory bodies can create pathways for stronger economic growth, ultimately driving Nigeria closer to financial resilience and inclusivity on a global scale.
